BILL NUMBER: SB 1074	CHAPTERED  10/10/99

	CHAPTER   939
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 10, 1999
	PASSED THE SENATE   SEPTEMBER 7, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 1, 1999
	AMENDED IN ASSEMBLY   AUGUST 19, 1999
	AMENDED IN ASSEMBLY   JULY 7, 1999

INTRODUCED BY   Committee on Public Employment and Retirement
(Senators Ortiz (Chair), Baca, Karnette, and Lewis)

                        FEBRUARY 26, 1999

   An act to amend Sections 22000, 22007, 22008, 22119.2, 22128,
22134, 22135, 22136, 22138.5, 22147.5, 22148, 22161, 22163, 22306,
22327, 22360, 22400, 22455.5, 22457, 22458, 22459, 22502, 22503,
22504, 22508, 22508.5, 22514, 22516, 22601.5, 22602, 22604, 22664,
22713, 22714, 22717, 22718, 22801, 22803, 22805, 22820, 22823, 22826,
22955, 23003, 23004, 23006, 23201, 23702, 23851, 24101.5, 24201,
24203.5, 24211, 24212, 24213, 24300, 24305.5, 24306, 24307, 24600,
24615, 26135, 26202, 26215, 26301, 26303, 26401.5, 26504, 26603,
26604, 27410, 44494, and 47611 of, to add Sections 22104.5, 22106.1,
22106.2, 22109.5, 22115.2, 22115.5, 22156.1, 22156.2, 22156.5,
22170.5, 22360.5, 22724, and 23805.5 to, to repeal and add Section
24205 of, the Education Code, and to amend Section 20639 of the
Government Code, relating to the State Teachers' Retirement System.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1074, Committee on Public Employment and Retirement.    State
Teachers' Retirement System.
   The State Teachers' Retirement Law prescribes the retirement
benefits of eligible teachers in the public schools who are
participants in the Defined Benefit Program and the Cash Balance
Benefit Program.  Those programs were separately administered by the
Teachers' Retirement Board until they were merged by Chapter 1048 of
the Statutes of 1998.
   This bill would revise various provisions to reflect that merger,
make related technical changes, update various provisions, and codify
various existing regulations.  The bill would define various terms
for purposes of benefit computations.
   The State Teachers' Retirement Law prescribes retirement benefits
for a nonmember spouse who is awarded a separate account upon legal
separation or dissolution of marriage.
   This bill would incrementally increase the maximum benefit factor
for calculation of benefits for a nonmember spouse whose retirement
is effective on or after January 1, 1999, and at an age greater than
normal retirement age, as specified.
   The State Teachers' Retirement Law provides increased benefits for
members who have 30 or more years of credited service, subject to
certain conditions.
   The bill would specify types of credited service that are excluded
from or included in the calculation of credited service for
determining eligibility for those increased benefits and provide that
nonmember spouses are eligible for those increased benefits if the
member had 30 or more years of credited service on the date the
parties separated.  The bill would state that certain of these
provisions are declaratory of existing law.
   Existing law, known as the Dave Elder State Teachers' Retirement
System Home Loan Program Act, establishes a member home loan
financing program and requires the Teachers' Retirement Board to
adopt regulations governing the program.
   This bill would modify the terms and conditions of that program
and add an authorization for personal loans, secured by a portion of
a member's accumulated retirement contributions, to be used to
finance a portion of the purchase price of the member's home, subject
to specified terms.
   The bill would provide that any other act enacted by the
Legislature during 1999 that affects any section of the bill shall
prevail over the provisions of the bill.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 22000 of the Education Code is amended to read:

   22000.  This part may be known and cited as the E. Richard Barnes
Act and together with Part 14 (commencing with Section 26000) shall
be known as the Teachers' Retirement Law.
  SEC. 2.  Section 22007 of the Education Code is amended to read:
   22007.  The obligations of any member, or the member's
beneficiaries, to this system and the Defined Benefit Program
continue throughout membership, and thereafter until all of the
obligations of this system and the Defined Benefit Program to or in
respect to the member or the member's beneficiaries have been
discharged.
  SEC. 3.  Section 22008 of the Education Code is amended to read:
   22008.  For the purposes of payments into or out of the retirement
fund for adjustments of errors or omissions with respect to the
Defined Benefit Program, the period of limitation of actions shall be
applied, except as provided in Sections 23302 and 24613, as follows:

   (a) No action may be commenced by or against the board, the
system, or the plan more than three years after all obligations to or
on behalf of the member, former member, or beneficiary have been
discharged.
   (b) If the system makes an error that results in incorrect payment
to a member, former member, or beneficiary, the system's right to
commence recovery shall expire three years from the date the
incorrect payment was made.
   (c) If an incorrect payment is made due to lack of information or
inaccurate information regarding the eligibility of a member, former
member, or beneficiary to receive benefits under the plan, the period
of limitation shall commence with the discovery of the incorrect
payment.
   (d) Notwithstanding any other provision of this section, if an
incorrect payment has been made on the basis of fraud or intentional
misrepresentation by a member, beneficiary, or other party in
relation to or on behalf of a member or beneficiary, the three-year
period of limitation shall not be deemed to commence or to have
commenced until the system discovers the incorrect payment.
   (e) The collection of overpayments under subdivisions (b), (c),
and (d) shall be made pursuant to Section 24617.
  SEC. 4.  Section 22104.5 is added to the Education Code, to read:
   22104.5.  "Actuary" means a person professionally trained in the
technical and mathematical aspects of insurance, pensions, and
related fields who has been appointed by the board for the purpose of
actuarial services required under this part.
  SEC. 5.  Section 22106.1 is added to the Education Code, to read:
   22106.1.  "Base days" means the number of days of creditable
service  required to earn one year of service credit.
  SEC. 6.  Section 22106.2 is added to the Education Code, to read:
   22106.2.  "Base hours" means the number of hours of creditable
service required to earn one year of service credit.
  SEC. 7.  Section 22109.5 is added to the Education Code, to read:
   22109.5.  "Break in service," for purposes of determining a member'
s final compensation, means:
   (a) With respect to service of a member employed as a full-time
employee and service performed by a member employed as a part-time
employee, any period of time covering a pay period during which a
member is on an unpaid leave or absence or a pay period in which a
member has not performed any creditable service.
   (b) For a member who has been employed in a substitute position:
   (1) And has a change in assignment during a school year to a
full-time or part-time position, a break in service is determined on
the same basis as for the full-time or part-time employment during
the same school year.
   (2) For less than 50 percent of their teaching career for which
service is credited, a break in service is determined on the same
basis as full-time employment.
   (3) For more than 50 percent of their teaching career for which
service is credited, a break in service is any period of time within
a school year for which compensation is not paid and service is not
credited.
   (c) If a member commenced performing service at the beginning of a
school term, July and August of the school year are not a break in
service; however, if the member commenced performing service after
the school term begins, the previous July and August are a break in
service.
   (d) Earnable salaries for a full pay period, but not beyond the
effective date of retirement, shall be used in determining final
compensation when the member performed service within that pay
period.
  SEC. 8.  Section 22115.2 is added to the Education Code, to read:
   22115.2.  "Concurrent membership" means membership in the Defined
Benefit Program by an individual who is credited with service that is
not used as a basis for benefits under any other public retirement
system and is also a member of the California Public Employees'
Retirement System, the Legislators' Retirement System, the University
of California Retirement System, county retirement systems
established under Chapter 3 (commencing with Section 31450) of Part 3
of Division 4 of Title 3 of the Government Code, or the San
Francisco City and County Employees' Retirement System.  A member
with concurrent membership shall have the right to the following:
   (a) Have final compensation determined pursuant to subdivision (c)
of Section 22134.
   (b) Redeposit accumulated retirement contributions pursuant to
Section 23201.
   (c) Apply for retirement pursuant to paragraph (2) of subdivision
(a) of Section 24201.
  SEC. 9.  Section 22115.5 is added to the Education Code, to read:
   22115.5.  (a) "Concurrent retirement" entitles a member of the
Defined Benefit Program to  retire for service  from the State
Teachers' Retirement System and from at least one of the retirement
systems with which the  member has concurrent membership, as defined
in Section 22115.2, on the same date or on different dates provided
that the member does not perform creditable service subject to
coverage under the other system or the Defined Benefit Program
between the two retirement dates.
   (b) A retired member who is subsequently employed in a position
subject to membership in a public retirement system, specified in
Section 22115.2, shall not be eligible for concurrent retirement.
  SEC. 10.  Section 22119.2 of the Education Code is amended to read:

   22119.2.  (a) "Creditable compensation" means salary and other
remuneration payable in cash by an employer to a member for
creditable service.  Creditable compensation shall include:
   (1) Money paid in accordance with a salary schedule based on years
of training and years of experience for creditable service performed
up to and including the full-time equivalent for the position in
which the service is performed.
   (2) For members not paid according to a salary schedule, money
paid for creditable service performed up to and including the
full-time equivalent for the position in which the service is
performed.
   (3) Money paid for the member's absence from performance of
creditable service as approved by the employer, except as provided in
paragraph (7) of subdivision (b).
   (4) Member contributions picked up by an employer pursuant to
Section 22903 or 22904.
   (5) Amounts deducted by an employer from the member's salary,
including deductions for participation in a deferred compensation
plan; deductions for the purchase of annuity contracts, tax-deferred
retirement plans, or other insurance programs; and deductions for
participation in a plan that meets the requirements of Section 125,
401(k), or 403(b) of Title 26 of the United States Code.
   (6) Money paid by an employer in addition to salary paid under
paragraph (1) or (2) if paid to all employees in a class in the same
dollar amount, the same percentage of salary, or the same percentage
of the amount being distributed.
   (7) Money paid in accordance with a salary schedule by an employer
to an employee for achieving certification from a national board
awarding certifications, in which eligibility for this certification
is based, in part, on years of training or years of experience in
teaching service, if the compensation is paid by the employer to all
employees who achieved this certification.
   (8) Any other payments the board determines to be "creditable
compensation."
   (b) "Creditable compensation" does not mean and shall not include:

   (1) Money paid for service performed in excess of the full-time
equivalent for the position.
   (2) Money paid for overtime or summer school service, or money
paid for the aggregate service performed as a member of the Defined
Benefit Program in excess of one year of service credit for any one
school year.
   (3) Money paid for service that is not creditable service pursuant
to Section 22119.5.
   (4) Money paid by an employer in addition to salary paid under
paragraph (1) or (2) of subdivision (a) if not paid to all employees
in a class in the same dollar amount, the same percentage of salary,
or the same percentage of the amount being distributed, except as
provided in paragraph (7) of subdivision (a).
   (5) Fringe benefits provided by an employer.
   (6) Job-related expenses paid or reimbursed by an employer.
   (7) Money paid for unused accumulated leave.
   (8) Severance pay or compensatory damages or money paid to a
member in excess of salary as a compromise settlement.
   (9) Annuity contracts, tax-deferred retirement programs, or other
insurance programs, including, but not limited to, plans that meet
the requirements of Section 125, 401(k), or 403(b) of Title 26 of the
United States Code that are purchased by an employer for the member
and are not deducted from the member's salary.
   (10) Any payments determined by the board to have been made by an
employer for the principal purpose of enhancing a member's benefits
under the Defined Benefit Program.  An increase in the salary of a
member who is the only employee in a class pursuant to subdivision
(b) of Section 22112.5 that arises out of an employer's restructuring
of compensation during the member's final compensation period shall
be presumed to have been granted for the principal purpose of
enhancing benefits under the Defined Benefit Program and shall not be
creditable compensation.  If the board determines sufficient
evidence is provided to the system to rebut this presumption, the
increase in salary shall be deemed creditable compensation.
   (11) Any other payments the board determines not to be "creditable
compensation."
   (c) Any employer or person who knowingly or willfully reports
compensation in a manner inconsistent with subdivision (a) or (b)
shall reimburse the plan for any overpayment of benefits that occurs
because of that inconsistent reporting and may be subject to
prosecution for fraud, theft, or embezzlement in accordance with the
Penal Code.  The system may establish procedures to ensure that
compensation reported by an employer is in compliance with this
section.
   (d) The definition of "creditable compensation" in this section is
designed in accordance with sound funding principles that support
the integrity of the retirement fund.  These principles include, but
are not limited to, consistent treatment of compensation throughout
the career of the individual member, consistent treatment of
compensation for an entire class of employees, the prevention of
adverse selection, and the exclusion of adjustments to, or increases
in, compensation for the principal purpose of enhancing benefits.
   (e) This section shall be deemed to have become operative on July
1, 1996.
  SEC. 11.  Section 22128 of the Education Code is amended to read:
   22128.  "Early retirement" and "early retirement age" mean the age
of 55 years, which is the age upon attainment of which the member
becomes eligible for a service retirement allowance with reduction
because of age and without special qualifications.
  SEC. 12.  Section 22134 of the Education Code is amended to read:
   22134.  (a) "Final compensation" means the highest average annual
compensation earnable by a member during any period of three
consecutive school years while an active member of the Defined
Benefit Program or time during which he or she was not a member but
for which the member has received credit under the Defined Benefit
Program, except time that was so credited for service performed
outside this state prior to July 1, 1944.  The last three consecutive
years of employment shall be used by the system in determining final
compensation unless designated to the contrary in writing by the
member.
   (b) For purposes of this section, periods of service separated by
breaks in service may be aggregated to constitute a period of three
consecutive years, if the periods of service are consecutive except
for the breaks.
   (c) The determination of final compensation of a member who  has
concurrent membership in another retirement system pursuant to
Section 22115.2 shall take into consideration the compensation
earnable while a member of the other system, provided that all of the
following exist:
   (1) The member was in state service or in the employment of a
local school district or a county superintendent of schools.
   (2) Service under the other system was not performed concurrently
with service under the Defined Benefit Program.
   (3) Retirement under the Defined Benefit Program is concurrent
with the member's retirement under the other system.
   (d) The compensation earnable for the first position in which
California service was credited shall be used when additional
compensation earnable is required to accumulate three consecutive
years for the purpose of determining final compensation under Section
23805.
   (e) If a member has received service credit for part-time service
performed prior to July 1, 1956, the member's final compensation
shall be adjusted for that service in excess of one year by the ratio
that part-time service bears to full-time service.
   (f) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978.  The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.
   (g) The amendment of former Section 22127 made by Chapter 782 of
the Statutes of 1982 does not constitute a change in, but is
declaratory of, the existing law.
  SEC. 13.  Section 22135 of the Education Code is amended to read:
   22135.  (a) Notwithstanding subdivisions (a) and (b) of Section
22134, "final compensation" means the highest annual compensation
earnable by an active member who is a classroom teacher who retires,
becomes disabled, or dies, after June 30, 1990, during any period of
12 consecutive months during his or her membership in the plan's
Defined Benefit Program.  The last 12 consecutive months of
employment shall be used by the system in determining final
compensation unless designated to the contrary in writing by the
member.
   (b) Section 22134, except subdivision (a) of that section, shall
apply to classroom teachers who retire after June 30, 1990, and any
statutory reference to Section 22134 or "final compensation" with
respect to a classroom teacher who retires, becomes disabled, or
dies, after June 30, 1990, shall be deemed to be a reference to this
section.
   (c) As used in this section, "classroom teacher" means any of the
following:
   (1) All teachers and substitute teachers in positions requiring
certification qualifications who spend, during the last 10 years of
their employment with the same employer which immediately precedes
their retirement, 60 percent or more of their contract time each year
providing direct instruction.  For the purpose of determining
continuity of employment within the meaning of this subdivision, an
authorized leave of absence for sabbatical or illness or other
collectively bargained or employer-approved leaves shall not
constitute a break in service.
   (2) Other certificated personnel who spend, during the last 10
years of their employment with the same employer that immediately
precedes their retirement, 60 percent or more of their contract time
each year providing direct services to pupils, including, but not
limited to, librarians, counselors, nurses, speech therapists,
resource specialists, audiologists, audiometrists, hygienists,
optometrists, psychologists, driver safety instructors, and personnel
on special assignment to perform school attendance and adjustment
services.
   (d) As used in this section, "classroom teacher" does not include
any of the following:
   (1) Certificated employees whose job descriptions require an
administrative credential.
   (2) Certificated employees whose job descriptions include
responsibility for supervision of certificated staff.
   (3) Certificated employees who serve as advisers, coordinators,
consultants, or developers or planners of curricula, instructional
materials, or programs, who spend, during the last 10 years of their
employment with the same employer that immediately precedes their
retirement, less than 60 percent of their contract time in direct
instruction.
   (4) Certificated employees whose job descriptions require
provision of direct instruction or services, but who are functioning
in nonteaching assignments.
   (5) Classified employees.
   (e) This section shall apply only to teachers employed by an
employer that has, pursuant to Chapter 10.7 (commencing with Section
3540) of Division 4 of Title 1 of the Government Code, entered into a
written agreement with an exclusive representative, that makes this
section applicable to all of its classroom teachers, as defined in
subdivision (c).
   (f) The written agreement shall include a mechanism to pay for all
increases in allowances provided for by this section through
employer contributions or employee contributions or both, which shall
be collected and retained by the employer in a trust fund to be used
solely and exclusively to pay the system for all increases in
allowances provided by this section and related administrative costs;
and a mechanism for disposition of the employee's contributions if
employment is terminated before retirement, and for the establishment
of a trust fund board.  The trust fund board shall administer the
trust fund and shall be composed of an equal number of members
representing classroom teachers chosen by the bargaining agent and
the employer.  If the employer agrees to pay the total cost of
increases in allowances, the establishment of a trust fund and a
trust fund board shall be optional to the employer.  The employer,
within 30 days of receiving an invoice from the system, shall
reimburse the retirement fund the amount determined by the Teachers'
Retirement Board to be the actuarial equivalent of the difference
between the allowance the member or beneficiary receives pursuant to
this section and the allowance the member or beneficiary would have
received if the member's final compensation had been computed under
Section 22134 and the proportionate share of the cost to the plan's
Defined Benefit Program, as determined by the Teachers' Retirement
Board, of administering this section.  The payment shall include the
cost of all increases in allowances provided for by this section for
all years of service credited to the member as of the  benefit
effective date.  Interest  shall be charged at the regular interest
rate for any payment not received within 30 days of receipt of the
invoice.  Payments not received within 30 days after receipt of the
invoice may be collected pursuant to Section 23007.
   (g) Upon the execution of the agreement, the employer shall notify
all certificated employees of the agreement and any certificated
employee of the employer, who is a member of the Public Employees'
Retirement System pursuant to Section 22508, that he or she may,
within 60 days following the date of notification, elect to terminate
his or her membership in the Public Employees' Retirement System and
become a member of this plan's Defined Benefit Program.  However,
only service credited under the Defined Benefit Program subsequent to
the date of that election shall be subject to this section.
   (h) An employer that agrees to become subject to this section,
shall, on a form and within the timeframes prescribed by the system,
certify the applicability of this section to a member pursuant to the
criteria set forth in this section when a retirement, disability, or
family allowance becomes payable.
   (i) For a nonmember spouse, final compensation shall be determined
pursuant to paragraph (2) of subdivision (c) of Section 22664.  The
employer, within 30 days of receiving an invoice from the system,
shall reimburse the retirement fund pursuant to subdivision (f).
Interest shall be charged at the regular interest rate for payments
not received within the prescribed timeframe.  Payments not received
within 30 days of invoicing may be collected pursuant to Section
23007.
  SEC. 14.  Section 22136 of the Education Code is amended to read:
   22136.  (a) "Final compensation" with respect to a member whose
salary while an active member was reduced because of a reduction in
school funds means the highest average annual compensation earnable
by the member during any three years while employed to perform
creditable service subject to coverage by the Defined Benefit Program
if the member elects to be subject to this section.
   (b) For the purposes of this section, a year shall be considered
to be a period of 12 consecutive months.
  SEC. 15.  Section 22138.5 of the Education Code is amended to read:

   22138.5.  (a) "Full time" means the days or hours of creditable
service the employer requires to be performed by a class of employees
in a school year in order to earn the compensation earnable as
defined in Section 22115 and specified under the terms of a
collective bargaining agreement or employment agreement.  For the
purpose of crediting service under this part, "full time" shall not
be less than the minimum standards specified in this section.
   (b) The minimum standard for full time in kindergarten through
grade 12 shall be:
   (1) One hundred seventy-five days per year or 1,050 hours per
year, except as provided in paragraphs (2) and (3).
   (2) (A) One hundred ninety days per year or 1,520 hours per year
for all principals and program managers, including advisers,
coordinators, consultants, and developers or planners of curricula,
instructional materials, or programs, and for administrators, except
as provided in subparagraph (B).
   (B) Two hundred fifteen days per year or 1,720 hours per year
including school and legal holidays pursuant to the policy adopted by
the employer's governing board for administrators at a county office
of education.
   (3) One thousand fifty hours per year for teachers in adult
education programs.
   (c) The minimum standard for full time in community colleges shall
be:
   (1) One hundred seventy-five days per year or 1,050 hours per
year, except as provided in paragraphs (2), (3), (4), (5), and (6).
Full time shall include time for duties the employer requires to be
performed as part of the full-time assignment for a particular class
of employees.
   (2) One hundred ninety days per year or 1,520 hours per year for
all program managers and for administrators, except as provided in
paragraph (3).
   (3) Two hundred fifteen days per year or 1,720 hours per year
including school and legal holidays pursuant to the policy adopted by
the employer's governing board for administrators at a district
office.
   (4) One hundred seventy-five days per year or 1,050 hours per year
for all counselors and librarians.
   (5) Five hundred twenty-five instructional hours per year for all
instructors employed on a part-time basis.  If an instructor receives
compensation for office hours pursuant to Article 10 (commencing
with Section 87880) of Chapter 3 of Part 51, then the minimum
standard established herein shall be increased appropriately by the
number of office hours required annually for the class of employees.

   (6) Eight hundred seventy-five instructional hours per year for
all adult education instructors.  If an instructor receives
compensation for office hours pursuant to Article 10 (commencing with
Section 87880) of Chapter 3 of Part 51, then the minimum standard
established herein shall be increased appropriately by the number of
office hours required annually for the class of employees.
   (d) The board shall have final authority to determine full time
for purposes of crediting service under this part if full time is not
otherwise specified herein.
  SEC. 16.  Section 22147.5 of the Education Code is amended to read:

   22147.5.  "Nonqualified service" means time during which
creditable service subject to coverage by the Defined Benefit Program
is not performed, excluding time a member is eligible to purchase as
permissive or additional service credit pursuant to Chapter 14
(commencing with Section 22800), Chapter 14.2 (commencing with
Section 22820), and Chapter 14.5 (commencing with Section 22850).
  SEC. 17.  Section 22148 of the Education Code is amended to read:
   22148.  "Normal retirement" and "normal retirement age" mean the
age of 60 years, which is the age upon attainment of which the member
becomes eligible for a service retirement allowance without
reduction because of age and without special qualifications.
  SEC. 18.  Section 22156.1 is added to the Education Code, to read:

   22156.1.  "Present value," for purposes of Section 22723, means
the amount of money needed on the effective date of retirement to
reimburse the system for the actuarially determined cost of the
portion of a member's retirement allowance attributable to unused
excess sick leave days.  The present value on the effective date of
retirement shall equal the number of unused excess sick leave days
divided by the number of base days, multiplied by the prior year's
compensation earnable multiplied by the present value factor.
  SEC. 19.  Section 22156.2 is added to the Education Code, to read:

   22156.2.  "Present value factor," for purposes of Section 22156.1,
means an overall average rate based upon the demographics of members
who recently retired under the Defined Benefit Program and regular
interest that shall determine present value on the effective date of
retirement.
  SEC. 20.  Section 22156.5 is added to the Education Code, to read:


    22156.5.  "Prior year's compensation earnable" means the
compensation earnable for the most recent school year in which the
member earned service credit that precedes the last school year in
which the member earned service credit.
  SEC. 21.  Section 22161 of the Education Code is amended to read:
   22161.  "Public school" means any day or evening elementary
school, any day or evening secondary school, community college,
technical school, kindergarten school, and prekindergarten school
established by the Legislature, or by municipal or district
authority.
  SEC. 22.  Section 22163 of the Education Code is amended to read:
   22163.  "Reinstatement" means the change in status with respect to
the Defined Benefit Program under this part from a disabled or
retired member to an active or inactive member and termination of one
of the following:
   (a) A service retirement allowance pursuant to Section 24208.
   (b) A disability retirement allowance pursuant to Section 24117.
   (c) A disability allowance pursuant to Section 24004 or 24015.
   (d) A service retirement allowance or disability retirement
allowance pursuant to Section 23404.
  SEC. 23.  Section 22170.5 is added to the Education Code, to read:

   22170.5.  (a) "Sick leave days" means the number of days of
accumulated and unused leave of absence for illness or injury.
   (b) "Basic sick leave day" means the equivalent of one day's paid
leave of absence per pay period due to illness or injury.
   (c) "Excess sick leave days" means the day or total number of
days, granted by an employer in a pay period as defined in Section
22154 after June 30, 1986, for paid leave of absence due to illness
or injury, in excess of a basic sick leave day.
  SEC. 24.  Section 22306 of the Education Code is amended to read:
   22306.  (a) Information filed with the system by a member,
participant, or beneficiary of the plan is confidential and shall be
used by the system for the sole purpose of carrying into effect the
provisions of this part.  No official or employee of the system who
has access to the individual records of a member, participant, or
beneficiary shall divulge any confidential information concerning
those records to any person except in the following instances:
   (1) To the member, participant, or beneficiary to whom the
information relates.
   (2) To the authorized representative of the member, participant,
or beneficiary.
   (3) To the governing board of the member's or participant's
current or former employer.
   (4) To any department, agency, or political subdivision of this
state.
   (5) To other individuals as necessary to locate a person to whom a
benefit may be payable.
   (6) Pursuant to subpoena.
   (b) Information filed with the system in a beneficiary designation
form may be released after the death of the member or participant to
those persons who may provide information necessary for the
distribution of benefits.
   (c) The information is not open to inspection by anyone except the
board and its officers and employees of the system, and any person
authorized by the Legislature to make inspections.
  SEC. 25.  Section 22327 of the Education Code is amended to read:
   22327.  Notwithstanding any other provision of law, the Employment
Development Department shall disclose to the board information in
its possession relating to the earnings of any person who is
receiving a disability benefit under the Defined Benefit Program.
The earnings information shall be released to the board only upon
written request from the board specifying that the person is
receiving disability benefits under the Defined Benefit Program.  The
request may be made by the chief executive officer of the system or
by an employee of the system so authorized and identified by name and
title by the chief executive officer in writing.  The board shall
notify recipients of disability benefits that earnings information
shall be obtained from the Employment Development Department upon
request by the board.  The board shall not release any earnings
information received from the Employment Development Department to
any person, agency, or other entity.  The system shall reimburse the
Employment Development Department for all reasonable administrative
expenses incurred pursuant to this section.
  SEC. 26.  Section 22360 of the Education Code is amended to read:
   22360.  (a) Notwithstanding any other provision of law, the board
may pursuant to Section 22203 and in conformance with its fiduciary
duty set forth in Section 22250, enter into correspondent agreements
with private lending institutions in this state to utilize the
retirement fund to invest in residential mortgages, including
assisting borrowers, through financing, to obtain homes in this
state.
   (b) The program shall, among other things, provide:
   (1) That home loans be made available to borrowers for the
purchase of single-family dwellings, two-family dwellings,
three-family dwellings, four-family dwellings, single-family
cooperative apartments, and single-family condominiums.
   (2) That the recipients of the loans occupy the homes as their
principal residences in accordance with policies established by the
board.
   (3) That the home loans shall be available only for the purchase
or refinance of homes in this state.
   (4) That the amount and length of the loans shall be pursuant to a
schedule periodically established by the board that shall provide a
loan of up to 100 percent of the appraised value.  In no event shall
the loan amount exceed three hundred fifty thousand dollars
($350,000).  The portion of any loan exceeding 80 percent of value
shall be insured by an admitted mortgage guaranty insurer conforming
to Chapter 2A (commencing with Section 12640.01) of Part 6 of
Division 2 of the Insurance Code, in an amount so that the
unguaranteed portion of the loan does not exceed 75 percent of the
market value of the property together with improvements thereon.
   (5) That there may be prepayment penalties assessed on the loans
in accordance with policies established by the board.
   (6) That the criteria and terms for its loans shall be consistent
with the financial integrity of the program and the sound investment
of the retirement fund.
   (7) Any other terms and conditions as the board shall deem
appropriate.
   (c) It is the intent of the Legislature that the provisions of
this section be used to establish an investment program for
residential mortgages, including assisting borrowers in purchasing
homes in this state, or refinancing a mortgage loan.  The Legislature
intends that home loans made pursuant to this section shall be
secured primarily by the property purchased or refinanced and shall
not exceed the appraised value of that property.
   (d) Appropriate administrative costs of implementing this section
and Section 22360.5 shall be paid by the participating borrowers.
Those costs may be included in the loan amount.
   (e) Appropriate interest rates shall be periodically reviewed and
adjusted to provide loans to borrowers consistent with the financial
integrity of the home loan program and the sound and prudent
investment of the retirement fund.  Under no circumstances, however,
shall the interest rates offered to borrowers be below current market
rate.
   (f) The board shall administer this section and Section 22360.5
under other terms and conditions it deems appropriate and in keeping
with the investment standard.  The board may adopt policies as
necessary for its administration of this section and Section 22360.5
and to assure compliance with applicable state and federal laws.
   (g) This section and Section 22360.5 shall be known as, and may be
cited as, the Dave Elder State Teachers' Retirement System Home Loan
Program Act.
  SEC. 27.  Section 22360.5 is added to the Education Code, to read:

   22360.5.  (a) The board may include in any investment program
established pursuant to Section 22360 a procedure whereby a member
may obtain 100 percent financing for the purchase for a single-family
dwelling unit in accordance with the following criteria:
   (1) The member shall obtain one loan secured by the purchased
home, pursuant to Section 22360, and a second personal loan secured
by a portion of the accumulated retirement contributions in the
member's individual account.  The personal loan shall only be used
for the purchase of the member's principal residence and not for a
loan to refinance the member's existing mortgage.
   (2) The loan secured by the purchased home shall be consistent
with the requirements imposed by Section 22360.
   (3) In no event may the personal loan secured by the accumulated
retirement contributions in the member's individual account exceed
the lesser of 50 percent of the current value amount of the
accumulated retirement contributions or fifty thousand dollars
($50,000).
   (4) If two members are married, the personal loan secured by the
sum total of accumulated retirement contributions in both members'
accounts shall not exceed 5 percent of the loan.
   (5) The pledge of security under this section shall remain in
effect until the personal loan is paid in full.
   (b) The pledge of security under this section shall take binding
effect.  In the event of a default on the personal loan secured by
the member's retirement contributions as authorized by this section,
the board shall deduct an amount from the member's accumulated
retirement contributions on deposit and adjust the member's
accumulated retirement contributions as necessary to recover any
outstanding loan balance prior to making any disbursement of a refund
or a lump-sum distribution.
   (c) In the event of a default on the personal loan by a member,
the board shall deduct the monthly principal plus appropriate
interest from the member's benefit, when the member begins receiving
a benefit, until the loan is paid in full.
   (d) In the event of a default on the personal loan by a member
receiving a benefit, the board shall deduct the monthly principal and
interest from the member's benefit until the personal loan is paid
in full.
   (e) The secured personal loan permitted under this section shall
be made available only to members who meet eligibility criteria as
determined by the board.
   (f) In the event of a refund or lump-sum distribution of the
accumulated retirement contributions, the member's account shall be
adjusted as necessary to recover any outstanding loan balance.
   (g) If the member is married at the time the home is purchased
with a personal loan secured by the member's accumulated retirement
contributions as authorized by this section, then the member's spouse
shall agree in writing to the pledge of security, as to his or her
community interest in the amount pledged, regardless of whether title
to the home is held in joint tenancy.
   (h) For purposes of the section only, "member" means any person
who is entitled to receive an allowance funded by the system pursuant
to this part or Part 14, notwithstanding any vesting requirement and
without regard to present eligibility to retire, and who is not
retired or disabled.
  SEC. 28.  Section 22400 of the Education Code is amended to read:
   22400.  (a) There is in the State Treasury a special trust fund to
be known as the Teachers' Retirement Fund.  There shall be deposited
in that fund the assets of the plan and its predecessors, consisting
of employee contributions, employer contributions, state
contributions, appropriations made to it by the Legislature, income
on investments, other interest income, income from fees and
penalties, donations, legacies, bequests made to it and accepted by
the board, and any other amounts provided by this part and Part 14.
General Fund transfers pursuant to Section 22954 shall be placed in a
segregated account known as the Supplemental Benefit Maintenance
Account within the retirement fund, which is continuously
appropriated without regard to fiscal years, notwithstanding Section
13340 of the Government Code, for expenditure for the purposes of
Section 24415.
   (b) Disbursement of money from the retirement fund of whatever
nature shall be made upon claims duly audited in the manner
prescribed for the disbursement of other public funds except that
notwithstanding the foregoing disbursements may be made to return
funds deposited in the fund in error.
  SEC. 29.  Section 22455.5 of the Education Code is amended to read:

   22455.5.  (a) The Legislature finds and declares that the federal
Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) requires all
public employers to provide their employees with either social
security coverage or membership in a qualified retirement plan.
   (b) Employers shall make available criteria for membership,
including optional membership, in a timely manner to all persons
employed to perform creditable service subject to coverage by the
Defined Benefit Program, and shall inform part-time and substitute
employees, within 30 days of the date of hire, or by March 1, 1995,
whichever is later, that they may elect membership in the plan's
Defined Benefit Program at any time while employed.  Written
acknowledgment by the employee shall be maintained in employer files
on a form provided by this system.
   (c) Employers shall be liable to the plan for employee and
employer contributions and interest with respect to the Defined
Benefit Program from the date of hire, or March 1, 1995, whichever is
later, in addition to system administrative and audit costs, if an
audit or a member's complaint reveals noncompliance.  However, no
employer shall be liable for employee contributions for service
performed prior to January 1, 1995.
  SEC. 30.  Section 22457 of the Education Code is amended to read:
   22457.  (a) Each county superintendent shall give immediate notice
in writing to the board of the employment, death, resignation, or
discharge of any person employed by the county or by a school
district or community college district in the county to perform
creditable service subject to coverage by the Defined Benefit
Program.
   (b) Every other employing agency shall give similar notice with
respect to each person it employs to perform creditable service
subject to coverage by the Defined Benefit Program.
  SEC. 31.  Section 22458 of the Education Code is amended to read:
   22458.  Each employer shall provide the system with information
regarding the compensation to be paid to employees subject to the
Defined Benefit Program in that school year.  The information shall
be submitted annually as determined by the board and may include, but
shall not be limited to, employment contracts, salary schedules, and
local board minutes.
  SEC. 32.  Section 22459 of the Education Code is amended to read:
   22459.  (a) The county superintendent or other employing agency
shall withhold the salary of any member who fails to file information
required by the board in the administration of the Defined Benefit
Program, or to pay amounts due from the members to the fund with
respect to the Defined Benefit Program.
   (b) The salary shall be withheld by the county superintendent or
employing agency upon his or her own knowledge, if any, of the
failure or upon notice from the board of the failure of the member to
file or pay.
   (c) The salary shall be withheld and not released until notice is
given by the board to the county superintendent or employing agency,
or until the county superintendent or agency knows otherwise, that
the information has been filed or the payment has been made.
  SEC. 33.  Section 22502 of the Education Code is amended to read:
   22502.  (a) Any person employed to perform creditable service on a
part-time basis who is not already a member of the Defined Benefit
Program shall become a member as of the first day of subsequent
employment to perform creditable service for 50 percent or more of
the full-time equivalent for the position, unless excluded from
membership pursuant to Section 22601.
   (b) This section shall apply to persons who perform service
subject to coverage under this part and to persons who are employed
by employers who provide benefits for their employees under Part 14
(commencing with Section 26000).
   (c) This section shall be deemed to have become operative on July
1, 1996.
  SEC. 34.  Section 22503 of the Education Code is amended to read:
   22503.  (a) Any person employed to perform creditable service as a
substitute teacher who is not already a member of the Defined
Benefit Program shall become a member as of the first day of the pay
period following the pay period in which the person performed 100 or
more complete days of creditable service during the school year in
one school district, community college district, or county
superintendent's office, unless excluded from membership pursuant to
Section 22601.
   (b) This section shall not apply to persons who are employed by
employers who provide benefits for their employees under Part 14
(commencing with Section 26000).
   (c) This section shall be deemed to have become operative on July
1, 1996.
  SEC. 35.  Section 22504 of the Education Code is amended to read:
   22504.  (a) Any person employed to perform creditable service on a
part-time basis who is not already a member of the Defined Benefit
Program shall become a member as of the first day of the pay period
following the pay period in which the person performed at least 60
hours of creditable service, if employed on an hourly basis, or 10
days of creditable service, if employed on a daily basis, during the
school year, in one school district, community college district, or
county superintendent's office, unless excluded from membership
pursuant to Section 22601.
   (b) This section shall not apply to persons who are employed by
employers who provide benefits for their employees under Part 14
(commencing with Section 26000).
   (c) This section shall be deemed to have become operative on July
1, 1996.
  SEC. 36.  Section 22508 of the Education Code is amended to read:
   22508.  (a) A member who becomes employed by the same or a
different school district, community college district, or a county
superintendent to perform service that requires membership in a
different public retirement system, may elect to have that service
subject to coverage by the Defined Benefit Program of this plan and
excluded from coverage by the other public retirement system.  The
election shall be made in writing on a form prescribed by this system
within 60 days from the date of hire in the position requiring
membership in the other public retirement system.  If that election
is made, the service performed for the employer after the date of
hire shall be considered creditable service for purposes of this
part.
   (b) A member of the Public Employees' Retirement System who is
employed by a school district, community college district, or a
county superintendent and who is subsequently employed to perform
creditable service subject to coverage by the Defined Benefit Program
of this plan may elect to have that service subject to coverage by
the Public Employees' Retirement System and excluded from coverage by
the Defined Benefit Program.  The election shall be made in writing
on a form prescribed by this system within 60 days from the date of
hire to perform creditable service.  If that election is made,
creditable service performed for the employer after the date of hire
shall be subject to coverage by the Public Employees' Retirement
System.
   (c) An election made by a member pursuant to this section shall be
irrevocable.
  SEC. 37.  Section 22508.5 of the Education Code is amended to read:

   22508.5.  (a) Any person who is a member of the Defined Benefit
Program of the State Teachers' Retirement Plan employed by a
community college district who subsequently is employed by the Board
of Governors of the California Community Colleges to perform duties
that are subject to membership in a different public retirement
system, shall be excluded from membership in that different system if
he or she elects, in writing, and files that election in the office
of the State Teachers' Retirement System within 60 days after the
person's entry into the new position, to continue as a member of the
Defined Benefit Program.  Only a person who has achieved plan vesting
is eligible to elect to continue as a member of the program.
   (b) A member of the Public Employees' Retirement System who is
employed by the Board of Governors of the California Community
Colleges who subsequently is employed by a community college district
to perform creditable service subject to coverage under the Defined
Benefit Program, may elect to have that service subject to coverage
by the Public Employees' Retirement System and excluded from coverage
under the Defined Benefit Program pursuant to Section 20309 of the
Government Code.
   (c) This section shall apply to changes in employment effective on
or after January 1, 1998.
  SEC. 38.  Section 22514 of the Education Code is amended to read:
   22514.  Members who have not achieved plan vesting shall become
eligible for benefits under the Defined Benefit Program when total
service under the Defined Benefit Program and the Public Employees'
Retirement System equals the minimum required under Sections 23801
and 23804.  These members shall retain vested rights to survivor and
disability benefits under this plan until they qualify for the
similar benefits under the Public Employees' Retirement System.
  SEC. 39.  Section 22516 of the Education Code is amended to read:
   22516.  (a) Nothing in this chapter shall be construed or applied
to exclude from membership in the Defined Benefit Program any person
employed to perform creditable service at a level that requires
mandatory membership in the program for which he or she has the right
to elect membership in the program or another retirement system and
who elects membership in the other retirement system, or who is
employed to perform creditable service at a level that does not
require mandatory membership in the Defined Benefit Program.
   (b) Service performed after becoming a member of another
retirement system shall not be credited to the member under this
part, nor shall contributions or benefits under this part be based
upon that service or the compensation received by the member during
that period of service, except as provided in the definition of
"final compensation" contained in Section 22134.
  SEC. 40.  Section 22601.5 of the Education Code is amended to read:

   22601.5.  (a) Any person employed to perform creditable service
who is not already a member in the Defined Benefit Program and whose
basis of employment is less than 50 percent of the full-time
equivalent for the position is excluded from mandatory membership in
the Defined Benefit Program.
   (b) This section shall apply to persons who perform service
subject to coverage under this part and to persons who are employed
by employers who provide benefits for their employees under Part 14
(commencing with Section 26000).
   (c) This section shall be deemed to have become operative on July
1, 1996.
  SEC. 41.  Section 22602 of the Education Code is amended to read:
   22602.  (a) Any person employed to perform creditable service as a
substitute teacher who is not already a member in the Defined
Benefit Program and who performs less than 100 complete days of
creditable service in one school district, community college
district, or county superintendent's office during the school year is
excluded from mandatory membership in the Defined Benefit Program.
   (b) This section shall not apply to persons who perform service
for employers who provide benefits for their employees under Part 14
(commencing with Section 26000).
   (c) The amendments to this section enacted during the 1995-96
Regular Session shall be deemed to have become operative on July 1,
1996.
  SEC. 42.  Section 22604 of the Education Code is amended to read:
   22604.  (a) Any person employed to perform creditable service on a
part-time basis who is not already a member in the Defined Benefit
Program and who performs less than 60 hours of creditable service in
a pay period if employed on an hourly basis, or less than 10 days of
creditable service in a pay period if employed on a daily basis,
during the school year in one school district, community college
district, or county superintendent's office is excluded from
mandatory membership in the Defined Benefit Program.
   (b) This section shall not apply to persons who are employed by
employers who provide benefits for their employees under Part 14
(commencing with Section 26000).
   (c) The amendments to this section enacted during the 1995-96
Regular Session shall be deemed to have become operative on July 1,
1996.
  SEC. 43.  Section 22664 of the Education Code is amended to read:
   22664.  The nonmember spouse who is awarded a separate account
shall have the right to a service retirement allowance under this
part.
   (a) The nonmember spouse shall be eligible to retire for service
under this part if the following conditions are satisfied:
   (1) The member had at least five years of credited service during
the period of marriage, at least one year of which had been performed
subsequent to the most recent refund to the member of accumulated
retirement contributions.  The credited service may include service
credited to the account of the member as of the date of the
dissolution or legal separation, previously refunded service,
out-of-state service, and permissive service credit that the member
is eligible to purchase at the time of the dissolution or legal
separation.
   (2) The nonmember spouse has at least two and one-half years of
credited service in his or her separate account.
   (3) The nonmember spouse has attained the age of 55 years or more.

   (b) A service retirement allowance of a nonmember spouse under
this part shall become effective upon any date designated by the
nonmember spouse, provided:
   (1) The requirements of subdivision (a) are satisfied.
   (2) The nonmember spouse has filed an application for service
retirement on a form provided by the system, that is executed no
earlier than six months before the effective date of the retirement
allowance.
   (3) The effective date is no earlier than the first day of the
month in which the application is received at the system's office in
Sacramento and the effective date is after the date the judgment or
court order pursuant to Section 22652 was entered.
   (c) (1) Upon service retirement at normal retirement age under
this part, the nonmember spouse shall receive a retirement allowance
that                                               shall consist of
an annual allowance payable in monthly installments equal to 2
percent of final compensation for each year of credited service.
   (2) If the nonmember spouse's retirement is effective at less than
normal retirement age and between early retirement age under this
part and normal retirement age, the retirement allowance shall be
reduced by one-half of 1 percent for each full month, or fraction of
a month, that will elapse until the nonmember spouse would have
reached normal retirement age.
   (3) If the nonmember spouse's service retirement is effective at
an age greater than normal retirement age and is effective on or
after January 1, 1999, the percentage of final compensation for each
year of credited service shall be determined pursuant to the
following table:


  Age at Retirement                Percentage
  60 1/4 ........................  2.033
  60 1/2 ........................  2.067
  60 3/4 ........................  2.10
  61 ............................  2.133
  61 1/4 ........................  2.167
  61 1/2 ........................  2.20
  61 3/4 ........................  2.233
  62 ............................  2.267
  62 1/4 ........................  2.30
  62 1/2 ........................  2.333
  62 3/4 ........................  2.367
  63 and over ...................  2.40

   (4) In computing the retirement allowance of the nonmember spouse,
the age of the nonmember spouse on the last day of the month in
which the retirement allowance begins to accrue shall be used.
   (5) Final compensation, for purposes of calculating the service
retirement allowance of the nonmember spouse under this subdivision,
shall be calculated according to the definition of final compensation
in Section 22134, 22135, or 22136, whichever is applicable, and
shall be based on the compensation earnable of the member up to the
date the parties separated, as established in the judgment or court
order pursuant to Section 22652.
   The nonmember spouse shall not be entitled to use any other
calculation of final compensation.
   (d) If the member is or was receiving a disability allowance under
this part with an effective date before or on the date the parties
separated as established in the judgment or court order pursuant to
Section 22652, or at any time applies for and receives a disability
allowance with an effective date that is before or coincides with the
date the parties separated as established in the judgment or court
order pursuant to Section 22652, the nonmember spouse shall not be
eligible to retire until after the disability allowance of the member
terminates.
   If the member who is or was receiving a disability allowance
returns to employment to perform creditable service subject to
coverage under the Defined Benefit Program or has his or her
allowance terminated under Section 24015, the nonmember spouse may
not be paid a retirement allowance until at least six months after
termination of the disability allowance and the return of the member
to employment to perform creditable service subject to coverage under
the Defined Benefit Program, or the termination of the disability
allowance and the employment or self-employment of the member in any
capacity, notwithstanding Section 22132.  If at the end of the
six-month period, the member has not had a recurrence of the original
disability or has not had his or her earnings fall below the amounts
described in Section 24015, the nonmember spouse may be paid a
retirement allowance if all other eligibility requirements are met.
   (1) The retirement allowance of the nonmember spouse under this
subdivision shall be calculated as follows:  the disability allowance
the member was receiving, exclusive of the benefits for dependent
children, shall be divided between the share of the member and the
share of the nonmember spouse.  The share of the nonmember spouse
shall be the amount obtained by multiplying the disability allowance,
exclusive of the benefits for dependent children, by the years of
service credited to the separate account of the nonmember spouse,
including service projected to the date of separation, and dividing
by the projected service of the member.  The nonmember spouse's
retirement allowance shall be the lesser of the share of the
nonmember spouse under this subdivision or the retirement allowance
under subdivision (c).
   (2) The share of the member shall be the total disability
allowance reduced by the share of the nonmember spouse.  The share of
the member shall be considered the disability allowance of the
member for purposes of Section 24213.
   (e) The nonmember spouse who receives a retirement allowance is
not a retired member under this part.  However, the allowance of the
nonmember spouse shall be increased by application of the improvement
factor and shall be eligible for the application of supplemental
increases and other benefit maintenance provisions under this part,
including, but not limited to, Sections 24411, 24412, and 24415 based
on the same criteria used for the application of these benefit
maintenance increases to the service retirement allowances of
members.
  SEC. 44.  Section 22713 of the Education Code is amended to read:
   22713.  (a) Notwithstanding any other provision of this chapter,
the governing board of a school district or a community college
district or a county superintendent of schools may establish
regulations that allow an employee who is a member of the Defined
Benefit Program to reduce his or her workload from full time to part
time, and receive the service credit the member would have received
if the member had been employed on a full-time basis and have his or
her retirement allowance, as well as other benefits that the member
is entitled to under this part, based, in part, on final compensation
determined from the compensation earnable the member would have been
entitled to if the member had been employed on a full-time basis.
   (b) The regulations shall include, but shall not be limited to,
the following:
   (1) The option to reduce the member's workload shall be exercised
at the request of the member and can be revoked only with the mutual
consent of the employer and the member.
   (2) The member shall have been employed full time to perform
creditable service subject to coverage under the Defined Benefit
Program for at least 10 years including five years immediately
preceding the reduction in workload.
   (3) The member shall not have had a break in service during the
five years immediately preceding the reduction in workload.  For
purposes of this subdivision, sabbaticals and other approved leaves
of absence shall not constitute a break in service.  However, time
spent on a sabbatical or other approved leave of absence shall not be
used in computing the five-year full-time service requirement
prescribed by this subdivision.
   (4) The member shall have reached the age of 55 years prior to the
reduction in workload.
   (5) The reduced workload shall be performed for a period of time,
as specified in the regulations.  The period of time specified in the
regulations shall not exceed 10 years.
   (6) The reduced workload shall be equal to at least one-half of
the full-time equivalent required by the member's contract of
employment during his or her final year of full-time employment.
   (7) The member shall be paid creditable compensation that is the
pro rata share of the creditable compensation the member would have
been paid had the member not reduced his or her workload.
   (c) Prior to the reduction of a member's workload under this
section, the employer in conjunction with the administrative staff of
the State Teachers' Retirement System and the Public Employees'
Retirement System, shall verify the member's eligibility for the
reduced workload program.
   (d) The member shall make contributions to the Teachers'
Retirement Fund in the amount that the member would have contributed
had the member performed creditable service on a full-time basis
subject to coverage under the Defined Benefit Program.
   (e) The employer shall contribute to the Teachers' Retirement Fund
at a rate adopted by the board as a plan amendment with respect to
the Defined Benefit Program an amount based upon the creditable
compensation that would have been paid to the member had the member
performed creditable service on a full-time basis subject to coverage
under the Defined Benefit Program.
   (f) The employer shall maintain the necessary records to
separately identify each member who participates in the reduced
workload program pursuant to this section.
  SEC. 45.  Section 22714 of the Education Code is amended to read:
   22714.  (a) Whenever the governing board of a school district or a
community college district or a county office of education, by
formal action taken prior to January 1, 1999, determines pursuant to
Section 44929 or 87488 that because of impending curtailment of or
changes in the manner of performing services, the best interests of
the district or county office of education would be served by
encouraging certificated employees or academic employees to retire
for service and that the retirement will either:  result in a net
savings to the district or county office of education; result in a
reduction of the number of certificated employees or academic
employees as a result of declining enrollment; or result in the
retention of certificated employees who are credentialed to teach in,
or faculty who are qualified to teach in, teacher shortage
disciplines, including, but not limited to, mathematics and science,
an additional two years of service credit shall be granted under this
part to a member of the Defined Benefit Program if all of the
following conditions exist:
   (1) The member is  credited with five or more years of service
credit and retires for service under the provisions of Chapter 27
(commencing with Section 24201) during a period of not more than 120
days or less than 60 days, commencing no sooner than the effective
date of the formal action of the employer that shall specify the
period.
   (2) The employer transfers to the retirement fund an amount
determined by the Teachers' Retirement Board to equal the actuarial
equivalent of the difference between the allowance the member
receives after receipt of service credit pursuant to this section and
the amount the member would have received without the service credit
and an amount determined by the Teachers' Retirement Board to equal
the actuarial equivalent of the difference between the purchasing
power protection supplemental payment the member receives after
receipt of service credit pursuant to this section and the amount the
member would have received without the service credit.  The payment
for purchasing power shall be deposited in the Supplemental Benefit
Maintenance Account established by Section 22400 and shall be subject
to Section 24415.  The transfer to the retirement fund shall be made
in a manner, and time period not to exceed four years, that is
acceptable to the Teachers' Retirement Board.  The employer shall
transfer the required amount for all eligible employees who retire
pursuant to this section.
   (3) The employer transmits to the retirement fund the
administrative costs incurred by the system in implementing this
section, as determined by the Teachers' Retirement Board.
   (4) The employer has considered the availability of teachers or
academic employees to fill the positions that would be vacated
pursuant to this section.
   (b) (1) The school district shall demonstrate and certify to the
county superintendent that the formal action taken would result in
either:  (A) a net savings to the district; (B) a reduction of the
number of certificated employees as a result of declining enrollment,
as computed pursuant to Section 42238.5; or (C) the retention of
certificated employees who are credentialed to teach in teacher
shortage disciplines.
   (2) The county superintendent shall certify to the Teachers'
Retirement Board that a result specified in paragraph (1) can be
demonstrated.  The certification shall include, but not be limited
to, the information specified in subdivision (b) of Section 14502.  A
district that qualifies under subparagraph (B) of paragraph (1)
shall also certify that it qualifies as a declining enrollment
district as computed pursuant to Section 42238.5.
   (3) The school district shall reimburse the county superintendent
for all costs to the county superintendent that result from the
certification.
   (c) (1) The county office of education shall demonstrate and
certify to the Superintendent of Public Instruction that the formal
action taken would result in either:  (A) a net savings to the county
office of education; (B) a reduction of the number of certificated
employees as a result of declining enrollment; or (C) the retention
of certificated employees who are credentialed to teach in teacher
shortage disciplines.
   (2) The Superintendent of Public Instruction shall certify to the
Teachers' Retirement Board that a result specified in paragraph (1)
can be demonstrated.  The certification shall include, but not be
limited to, the information specified in subdivision (b) of Section
14502.
   (3) The Superintendent of Public Instruction may request
reimbursement from the county office of education for all
administrative costs that result from the certification.
   (d) (1) The community college district shall demonstrate and
certify to the chancellor's office that the formal action taken would
result in either:  (A) a net savings to the district; (B) a
reduction in the number of academic employees as a result of
declining enrollment, as computed pursuant to subdivision (c) of
Section 84701; or (C) the retention of faculty who are qualified to
teach in teacher shortage disciplines.
   (2) The chancellor shall certify to the Teachers' Retirement Board
that a result specified in paragraph (1) can be demonstrated.  The
certification shall include, but not be limited to, the information
specified in subdivision (c) of Section 84040.5.  A community college
district that qualifies under subparagraph (B) of paragraph (1) of
subdivision (b) of this section shall also certify that it qualifies
as a declining enrollment district as computed pursuant to
subdivision (c) of Section 84701.
   (3) The chancellor may request reimbursement from the community
college for all administrative costs that result from the
certification.
   (e) The opportunity to be granted service credit pursuant to this
section shall be available to all members employed by the school
district, community college district, or county office of education
who meet the conditions set forth in this section.
   (f) The amount of service credit shall be two years.
   (g) Any member of the Defined Benefit Program who retires under
this part for service under the provisions of Chapter 27 (commencing
with Section 24201) with service credit granted under this section
and who subsequently reinstates shall forfeit the service credit
granted under this section.
   (h) This section shall not be applicable to any member otherwise
eligible if the member receives any unemployment insurance payments
arising out of employment with an employer subject to this part
during a period extending one year beyond the effective date of the
formal action, or if the member is not otherwise eligible to retire
for service.
  SEC. 46.  Section 22717 of the Education Code is amended to read:
   22717.  (a) A member shall be granted credit at service retirement
for each day of accumulated and unused leave of absence for illness
or injury for which full salary is allowed to which the member was
entitled on the member's final day of employment with the employer by
which the member was last employed to perform creditable service
subject to coverage by the Defined Benefit Program.
   (b) The amount of service credit to be granted shall be determined
by dividing the number of days of accumulated and unused leave of
absence for illness or injury by the number of days of service the
employer requires the member's class of employees to perform in a
school year during the member's final year of creditable service
subject to coverage by the Defined Benefit Program, which shall not
be less than the minimum standard specified in Section 22138.5.  The
number of days shall not include school and legal holidays.  In no
event shall the divisor be less than 175.  For members employed less
than full time, the standards identified in Section 22138.5 shall be
considered as the minimum full-time equivalent.  For those standards
identified in Section 22138.5 that are applicable to teachers or
instructors and that are expressed only in terms of hours or
instructional hours, the number of hours or instructional hours shall
be divided by six to determine the number of days.
   (c) When the member has made application for service retirement
under this part, the employer shall certify to the board, within 30
days following the effective date of the member's service retirement,
the number of days of accumulated and unused leave of absence for
illness or injury that the member was entitled to on the final day of
employment.  The board may assess a penalty on delinquent reports.
   (d) This section shall be applicable to any person who retires on
or after January 1, 1999.
  SEC. 47.  Section 22718 of the Education Code is amended to read:
   22718.  (a) The Teachers' Retirement Board shall bill school
employers for service credit granted for unused excess sick leave
under this part, subject to the following provisions:
   (1) (A) In addition to the certification of sick leave days, the
employer shall also certify the number of unused excess sick leave
days.
   (B) Excess sick leave days granted by an employer other than the
member's last employer shall be deemed to be granted by the last
employer and shall be included in the certification if the member was
eligible to use those excess sick leave days while he or she was
employed by the last employer.
   (2) The billing shall be authorized only if the employer grants
more than one day of sick leave per pay period of at least four weeks
to members of the Defined Benefit Program.
   (3) The employer shall be billed only for the present value of the
unused excess sick leave days and any subsequent adjustments to the
billing shall be billed or refunded, as appropriate, to the employer.

   (4) (A) The employer shall remit the amount billed to the system
with the certification required by Section 22717 within 30 days after
the effective date of the member's retirement or within 30 days
after the date the system has notified the employer that a
certification must be made, whichever is later.
   (B) If payment is not received within 30 days, the present value
shall be recalculated to include regular interest from the due date
to the date full payment is received.
   (C) If the system has billed the employer for an additional
amount, the employer shall remit the additional amount within 30 days
after the date of the billing.  If payment is not received for the
additional amount within 30 days, the present value shall be
recalculated to include regular interest from the due date to the
date full payment is received.
   (b) If a school employer fails to pay a bill charged according to
subdivision (a), the Teachers' Retirement Board may request the
Superintendent of Public Instruction or the Chancellor of the
California Community Colleges, as appropriate, to reduce state
apportionments to the school employer by an amount equal to the
amount billed.  The superintendent or chancellor shall make the
reduction, and if requested by the board, direct the Controller to
reduce the amount transferred from the General Fund to Section A or
Section B, as appropriate, of the State School Fund by an equal
amount, which shall instead be transferred to the Teachers'
Retirement Fund.
  SEC. 48.  Section 22724 is added to the Education Code, to read:
   22724.  (a) To determine the number of excess sick leave days to
which a member is entitled when he or she retires, the employer shall
deduct the days of sick leave used by the member from the member's
accumulated and unused sick leave balance according to the following
method:
   (1) Sick leave usage shall first be deducted from the accumulated
and unused sick leave balance existing on July 1, 1986.
   (2) Sick leave usage shall next be deducted from basic sick leave
days granted to the member by an employer after June 30, 1986.
   (3) Sick leave usage shall then be deducted from any excess sick
leave days granted to the member by an employer after June 30, 1986.

   (b) Upon request from the board, the employer shall submit sick
leave records of past years for audit purposes.
  SEC. 49.  Section 22801 of the Education Code is amended to read:
   22801.  (a) A member who elects to receive additional service
credit as provided in this chapter shall pay, prior to retirement,
all contributions with respect to that service at the contribution
rate for additional service credit, adopted by the board as a plan
amendment, in effect at the time of election.  If the system is
unable to inform the member or beneficiary of the amount required to
purchase additional service credit prior to the effective date of the
applicable allowance, the member or beneficiary may make the
required payment within 30 working days after the date of mailing of
the statement of contributions and interest required or the effective
date of the appropriate allowance, whichever is later.  The payment
shall be paid in full before a member or beneficiary receives any
adjustment in the appropriate allowance due because of that payment.
Contributions shall be made in a lump sum, or in not more than 120
monthly installments.  No installment, except the final installment,
shall be less than twenty-five dollars ($25).
   (b) If the member is employed to perform creditable service
subject to coverage by the Defined Benefit Program at the time of the
election, the contributions shall be based upon the compensation
earnable in the current school year or either of the two immediately
preceding school years, whichever is highest.
   (c) If the member is not employed to perform creditable service
subject to coverage by the Defined Benefit Program at the time of the
election, the contributions shall be based upon the compensation
earnable in the last school year of credited service or either of the
two immediately preceding school years, whichever is highest.
   (d) The employer may pay the amount required as employer
contributions for additional service credited under paragraphs (2),
(6), (7), (8), and (9) of subdivision (a) of Section 22803.
   (e) The Public Employees' Retirement System shall transfer the
actuarial present value of the assets of a person who makes an
election pursuant to paragraph (10) of subdivision (a) of Section
22803.
   (f) Regular interest shall be charged on all contributions from
the end of the school year on which the contributions were based to
the date of payment.
   (g) Regular interest shall be charged on the monthly unpaid
balance if the member pays in installments.  Regular interest shall
not be charged or be payable for the period of a delay caused by the
system's inability or failure to determine and inform the member or
beneficiary of the amount of contributions and interest that is
payable.  The period of delay shall commence on the 20th day
following the day on which the member or beneficiary who wishes to
make payment evidences in writing to the system that he or she is
ready, willing, and able to make payment to the system.  The period
of delay shall cease on the first day of the month following the
mailing of notification of contributions and interest payable.
  SEC. 50.  Section 22803 of the Education Code is amended to read:
   22803.  (a) A member may elect to receive credit for any of the
following:
   (1) Service performed in a teaching position in a publicly
supported and administered university or college in this state.
   (2) Service performed in a certificated teaching position in a
child care center operated by a county superintendent of schools or a
school district in this state.
   (3) Service performed in a teaching position in the California
School for the Deaf or the California School for the Blind, or in
special classes maintained by the public schools of this state for
the instruction of the deaf, the hard of hearing, the blind, or the
semisighted.
   (4) Service performed in a certificated teaching position in a
federally supported and administered Indian school in this state.
   (5) Time served, not to exceed two years, in a certificated
teaching position in a job corps center administered by the United
States government in this state if the member was employed to perform
creditable service subject to coverage under the Defined Benefit
Program within one year prior to entering the job corps and returned
to employment to perform creditable service subject to coverage under
the Defined Benefit Program within six months following the date of
termination of service in the job corps.
   (6) Time spent on a sabbatical leave after July 1, 1956.
   (7) Time spent on an approved leave to participate in any program
under the federal Mutual Educational and Cultural Exchange Program.
   (8) Time spent on an approved maternity or paternity leave of two
years or less in duration, regardless of whether or not the leave was
taken before or after the addition of this subdivision.
   (9) Time spent on an approved leave, up to four months in any
12-month period, for family care or medical leave purposes, as
defined by Section 12945.2 of the Government Code, as it read on the
date leave was granted, excluding maternity and paternity leave.
   (10) Time spent employed by the Board of Governors of the
California Community Colleges in a position subject to coverage by
the Public Employees' Retirement System between July 1, 1991, and
December 31, 1997, provided the member has elected to return to
coverage under the State Teachers' Retirement System pursuant to
Section 20309 of the Government Code.
   (b) In no event shall the member receive credit for service or
time described in paragraphs (1) to (10), inclusive, of subdivision
(a) if the member has received or is eligible to receive credit for
the same service or time in the Cash Balance Benefit Program under
Part 14 (commencing with Section 26000) or another retirement system.

  SEC. 51.  Section 22805 of the Education Code is amended to read:

         22805.  (a) A member may elect to receive credit under this
part for time served in the active military service of the United
States or of this state, including active service in any uniformed
auxiliary to any branch of that military service authorized as an
auxiliary by Congress or the Legislature, or in the full-time paid
service of the American Red Cross prior to September 1957, if both of
the following conditions exist:
   (1) The time served was during war with any foreign power or
during other national emergency, or in time of peace if the member
was drafted for that service by the United States government.
   (2) The member was employed to perform creditable service subject
to coverage under the Defined Benefit Program within one year prior
to entering that service.  Time included under this section shall be
considered as served in the state in which the member was last
employed before entering that service.
   (b) Time during which the member was absent without compensation
for other cause, on leave, or otherwise, shall not be included.
  SEC. 52.  Section 22820 of the Education Code is amended to read:
   22820.  (a) A member, other than a retired member, may elect to
purchase out-of-state service credited in a public retirement system
for service covering public education in another state or territory
of the United States or by the United States for its citizens.  In no
event shall the member receive credit for this service if the member
has credit or is eligible to receive credit for the same service in
the Cash Balance Benefit Program under Part 14 (commencing with
Section 26000) or another public retirement system, excluding social
security.
   (b) The amount of out-of-state service for which a member may
purchase credit may not exceed the number of years of service
credited to the member in the out-of-state retirement system or 10
years, whichever is less.
   (c) Out-of-state service credit may be purchased under this
section by means of any of the following actions:
   (1) Paying an amount equal to the amount refunded from the other
public retirement system and receiving service credit under the
Defined Benefit Program pursuant to subdivision (a) of Section 22823.

   (2) Paying the contributions required under the Defined Benefit
Program pursuant to subdivision (a) of Section 22823 for the service
credited in the other public retirement system.
   (3) Paying an amount equal to the amount refunded from the other
public retirement system and an additional amount in accordance with
subdivision (a) of Section 22823 for the service credited in the
other public retirement system.
   (d) Contributions made to a plan qualified under Section 403(b) of
the Internal Revenue Code may not be used to purchase credit for
out-of-state service.
   (e) Compensation for out-of-state service shall not be used in
determining the highest average annual compensation earnable when
calculating final compensation.
   (f) The service credit purchased under this section shall not be
used to meet the eligibility requirements for benefits provided under
Sections 24001 and 24101.
  SEC. 53.  Section 22823 of the Education Code is amended to read:
   22823.  (a) A member who elects to receive credit for out-of-state
service as provided in this chapter shall pay all contributions with
respect to that service at the contribution rate for additional
service credit adopted by the board as a plan amendment, in effect at
the time of election.
   (b) (1) Any payment that a member may make to the system to obtain
credit for out-of-state service pursuant to this chapter shall be
paid in full prior to the effective date of a family, survivor,
disability, or retirement allowance.
   (2) If the system is unable to inform the member or beneficiary of
the amount required to purchase out-of-state service prior to the
effective date of the applicable allowance, the member or beneficiary
may make payment in full within 30 working days after the date of
mailing of the statement of contributions and interest required or
the effective date of the appropriate allowance, whichever is later.

   (c) Contributions for out-of-state service credit shall be made in
a lump sum, or in not more than 120 monthly installments.  No
installment, except the final installment, shall be less than
twenty-five dollars ($25).
   (d) Regular interest shall be charged on the monthly unpaid
balance if the member makes installment payments.
  SEC. 54.  Section 22826 of the Education Code is amended to read:
   22826.  (a) A member may elect to receive up to five years of
credit for nonqualified service provided the member is vested in the
Defined Benefit Program as provided in Section 22156.
   (b) A member who elects to receive credit for nonqualified service
as provided in this chapter shall contribute to the retirement fund
the actuarial cost of the service, including interest as appropriate,
as determined by the board based on the most recent valuation of the
plan with respect to the Defined Benefit Program.
   (1) Payment that a member may make to the system to obtain credit
for nonqualified service shall be paid in full prior to the effective
date of a family, survivor, disability, or retirement allowance.
   (2) If the system is unable to inform the member of the amount
required to purchase nonqualified service prior to the effective date
of the applicable allowance, the member may make payment in full
within 30 working days after the date of mailing of the statement of
contributions and interest required or the effective date of the
appropriate allowance, whichever is later.
   (c) Contributions for nonqualified service credit shall be made in
a lump sum or in not more than 120 monthly installments.  No
installment, except the final installment, shall be less than
twenty-five dollars ($25).
   (d) Regular interest shall be charged on the monthly unpaid
balance if the member makes installment payments.
  SEC. 55.  Section 22955 of the Education Code is amended to read:
   22955.  (a) Notwithstanding Section 13340 of the Government Code,
commencing July 1, 1999, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Teachers' Retirement Fund.  The
total amount of the appropriation for each year shall be equal to
3.102 percent of the total of the creditable compensation of the
immediately preceding calendar year upon which members' contributions
are based, to be calculated annually on October 1, and shall be
divided into four equal quarterly payments.
   (b) Notwithstanding Section 13340 of the Government Code,
commencing October 1, 1998, a continuous appropriation, in addition
to the appropriation made by subdivision (a), is hereby annually made
from the General Fund to the Controller for transfer to the Teachers'
Retirement Fund.  The total amount of the appropriation for each
year shall be equal to 0.524 percent of the total of the creditable
compensation of the immediately preceding calendar year upon which
members' contributions are based, to be calculated annually on
October 1, and shall be divided into four equal quarterly payments.
The percentage shall be adjusted to reflect the contribution required
to fund the normal cost deficit or the unfunded obligation as
determined by the board based upon a recommendation from its actuary.
  If a rate increase is required, the adjustment may be for no more
than 0.25 percent per year and in no case may the transfer made
pursuant to this subdivision exceed 1.505 percent of the total of the
creditable compensation of the immediately preceding calendar year
upon which members' contributions are based.  At any time when there
is neither an unfunded obligation nor a normal cost deficit, the
percentage shall be reduced to zero.
   The funds transferred pursuant to this subdivision shall first be
applied to eliminating on or before June 30, 2027, the unfunded
actuarial liability of the fund identified in the actuarial valuation
as of June 30, 1997.
   (c) For the purposes of this section, the term "normal cost
deficit" means the difference between the normal cost rate as
determined in the actuarial valuation required by Section 22311 and
the total of the member contribution rate required under Section
22901 and the employer contribution rate required under Section
22950, and shall exclude (1) the portion for unused sick leave
service credit granted pursuant to Section 22717, and (2) the cost of
benefit increases that occur after July 1, 1990.  The contribution
rates prescribed in Section 22901 and Section 22950 on July 1, 1990,
shall be utilized to make the calculations.  The normal cost deficit
shall then be multiplied by the total of the creditable compensation
upon which member contributions under this part are based to
determine the dollar amount of the normal cost deficit for the year.

   (d) Pursuant to Section 22001 and case law, members are entitled
to a financially sound retirement system.  It is the intent of the
Legislature that this section shall provide the retirement fund
stable and full funding over the long term.
   (e) This section continues in effect but in a somewhat different
form, fully performs, and does not in any way unreasonably impair,
the contractual obligations determined by the court in California
Teachers' Association v.  Cory, 155 Cal.App.3d 494.
   (f) Subdivision (b) shall not be construed to be applicable to any
unfunded liability resulting from any benefit increase or change in
contribution rate under this part that occurs after July 1, 1990.
   (g) The amendments to this section during the 1991-92 Regular
Session shall be construed and implemented to be in conformity with
the judicial intent expressed by the court in California Teachers'
Association v. Cory, 155 Cal.App.3d 494.
  SEC. 56.  Section 23003 of the Education Code is amended to read:
   23003.  (a) If a county superintendent of schools or employing
agency or school district or community college district that reports
directly to the system fails to make payment of contributions as
provided in Section 23002, the board may assess penalties.
   (b) The board may charge regular interest on any delinquent
contributions under this part.
  SEC. 57.  Section 23004 of the Education Code is amended to read:
   23004.  The county superintendent of schools or employing agency
shall, or a school district or community college district may, with
approval of the board, submit a report monthly to the system
containing such information as the board may require in the
administration of the plan.
  SEC. 58.  Section 23006 of the Education Code is amended to read:
   23006.  (a) If a county superintendent of schools or employing
agency or school district or community college district that reports
directly to the system, submits monthly reports late or in
unacceptable form, the board may assess penalties.
   (b) The board may assess penalties, based on the sum of the
employer and employee contributions required under this part by the
report for late or unacceptable submission of reports, at a rate of
interest equal to the regular interest rate or a fee of five hundred
dollars ($500), whichever is greater.
  SEC. 59.  Section 23201 of the Education Code is amended to read:
   23201.  Any person whose accumulated retirement contributions were
refunded, who wishes to establish concurrent membership, and who has
received, or will qualify to receive, a retirement allowance from
one or more of the retirement systems  defined in Section 22115.2,
may elect to redeposit the accumulated retirement contributions that
were refunded, with regular interest from the date of refund to the
date of payment, without being employed to perform creditable service
subject to coverage under the Defined Benefit Program.
  SEC. 60.  Section 23702 of the Education Code is amended to read:
   23702.  (a) All members in the Defined Benefit Program on October
15, 1992, who are not receiving a disability allowance or a
retirement allowance with an effective date prior to October 16,
1992, shall be eligible to make an irrevocable election, pursuant to
this chapter, to retain coverage under either the disability
allowance and family allowance programs or to have coverage under the
disability retirement and survivor benefits programs.
   (b) The member's eligibility to participate in the election shall
be based on the member's status in the Defined Benefit Program on
October 15, 1992, only, and not on prior or subsequent events.
  SEC. 61.  Section 23805.5 is added to the Education Code, to read:

   23805.5.  (a) A parent claiming a benefit under Section 23805 is
dependent if all of the following apply:
   (1) The parent was receiving one-half or more of his or her
support from the member for the tax year preceding the member's
death.
   (2) The parent was declared as a dependent on the income tax
return of the member for at least one of the two tax years preceding
the member's death.
   (3) No one else has assumed at least one-half of the parent's
support in the tax year of the member's death.
   (4) The parent has net assets of not more than twenty-five
thousand dollars ($25,000), excluding his or her personal residence
and personal property therein.
   (b) A person claiming a benefit under Section 23805 or his or her
guardian shall furnish the board a state or federal income tax return
and any other evidence regarding his or her financial status as the
board may require.
  SEC. 62.  Section 23851 of the Education Code is amended to read:
   23851.  (a) A death payment of not less than twenty thousand
dollars ($20,000) shall be paid to the beneficiary, as designated
pursuant to Section 23300, upon receipt of proof of death of an
active member, who had one or more years of credited service, at
least one of which had been performed subsequent to the most recent
refund of accumulated retirement contributions, if the member died
during any one of the following periods:
   (1) While in employment for which creditable compensation is paid.

   (2) Within four months after termination of creditable service or
termination of employment, whichever occurs first.
   (3) Within 12 months of the last day for which creditable
compensation was paid, if the member was on an approved leave of
absence without creditable compensation for reasons other than
disability or military service.
   (b) A death payment pursuant to this section shall not be payable
for the death of a member that occurs within one year commencing with
the effective date of termination of the service retirement
allowance pursuant to Section 24208 or during the six calendar months
commencing with the effective date of termination of the disability
retirement allowance pursuant to Section 24117.
   (c) The board may adjust the death payment amount following each
actuarial valuation based on changes in the All Urban California
Consumer Price Index and adopt as a plan amendment with respect to
the Defined Benefit Program any adjusted amount.
   (d) A designated beneficiary may waive the right to the death
payment in accordance with the requirements established by the
system.
  SEC. 63.  Section 24101.5 of the Education Code is amended to read:

   24101.5.  A member shall not be eligible for disability retirement
under the Defined Benefit Program while on a leave of absence to
serve as a full-time, elected officer of an employee organization,
even if the member receives service credit under Section 22711.
  SEC. 64.  Section 24201 of the Education Code is amended to read:
   24201.  (a) A member may retire for service under this part upon
written application for retirement to the board, under paragraph (1)
or (2) as follows:
   (1) The member has attained the age of 55 years or more and has at
least five years of credited service, at least one year of which has
been performed subsequent to the most recent refund of accumulated
retirement contributions.  The five years of credited service may
include out-of-state service purchased pursuant to Section 22820.
The number of years of credited service performed in California shall
not be less than the number of years necessary to determine final
compensation pursuant to Section 22134 or 22135, whichever is
applicable to the member.
   (2) The member is credited with service that is not used as a
basis for benefits under any other public retirement system,
excluding the federal social security system, if the member has
attained the age of 55 years or older and retires concurrently under
one or more of the retirement systems with which the  member has
concurrent membership as defined in Section 22115.2.
   (b) Application for retirement under paragraph (2) of subdivision
(a) may be made  even if the member has not earned five years of
service.
  SEC. 65.  Section 24203.5 of the Education Code is amended to read:

   24203.5.  (a) The percentage of final compensation used to compute
the allowance pursuant to Section 24202.5, 24203, or 24205 of a
member retiring on or after January 1, 1999, who has 30 or more years
of credited service, excluding service credited pursuant to Section
22714, 22715, or 22717, shall be increased by two-tenths of 1
percentage point, provided that the sum of the percentage of final
compensation used to compute the allowance in Section 24202.5, 24203,
or 24205, including any adjustments for retiring before the normal
retirement age, and the additional percentage provided by this
section does not exceed 2.40 percent.  For purposes of establishing
eligibility for the increased allowance pursuant to this section
only, credited service shall include credited service that a court
has ordered be awarded to a nonmember spouse pursuant to Section
22652.  A nonmember spouse shall also be eligible for the increased
allowance pursuant to this section if the member had 30 or more years
of credited service on the date the parties separated, as
established in the judgment or court order pursuant to Section 22652.

   (b) Nonqualified service credit for which contributions pursuant
to Section 22826 were made in a lump sum on or after January 1, 2000,
or for which the first installment was made on or after January 1,
2000, shall not be included in determining the eligibility for an
increased allowance pursuant to this section.
   (c) The amendments made to subdivision (a) in the first year of
the 1999-2000 Regular Session are declaratory of existing law.
  SEC. 66.  Section 24205 of the Education Code is repealed.
  SEC. 67.  Section 24205 is added to the Education Code, to read:
   24205.  Any member retiring prior to the age of 60 years, and who
has attained the age of 55 years, may elect to receive one-half of
the service retirement allowance for normal retirement age for a
limited time and then revert to the full retirement allowance for
normal retirement age.
   (a) The retirement allowance shall be based on service credit and
final compensation as of the date of retirement for service and shall
be calculated with the factor for normal retirement age.
   (b) If the member elects a joint and survivor option under Section
24300, the actuarial reduction shall be based on the member's and
beneficiary's ages as of the effective date of the early retirement.
If the member elected a preretirement option under Section 24307,
the actuarial reduction shall be based on the member's and
beneficiary's ages as determined by provisions of that section.
   (c) One-half of the retirement allowance as of the age of 60 years
shall be paid for a period of time equal to twice the elapsed time
between the effective date of retirement and the date of the retired
member's 60th birthday.
   (d) The full retirement allowance as calculated under subdivision
(a) or (b) shall begin to accrue as of the first of the month
following the reduction period as specified in subdivision (c).  The
full retirement allowance shall not begin to accrue prior to this
time under any circumstances, including, but not limited to, divorce
or death of the named beneficiary.
   (e) The annual improvement factor provided for in Sections 22140
and 22141 shall be based upon the retirement allowance as calculated
under subdivision (a) or (b).  The improvement factor shall begin to
accrue on September 1 following the retired member's 60th birthday.
These increases shall be accumulated and shall become payable when
the full retirement allowance for normal retirement age first becomes
payable.
   (f) Any ad hoc benefit increase with an effective date prior to
the retired member's 60th birthday shall not affect any allowance
payable under this section.  Only those ad hoc improvements with
effective dates on or after the retired member's 60th birthday shall
be accrued and accumulated and shall first become payable when the
full retirement allowance for normal retirement age becomes payable.

   (g) The cancellation of an option election in accordance with
Section 24305 shall not cancel the election under this section.  Upon
cancellation of the joint and survivor option, one-half of the
retired member's retirement allowance as calculated under subdivision
(a) shall become payable for the balance of the reduction period
specified in subdivision (c).
   (h) If a retired member who has elected a joint and survivor
option dies during the period when the reduced allowance is payable,
the beneficiary shall receive one-half of the allowance payable to
the beneficiary until the date when the retired member would have
received the full retirement allowance for normal retirement age.  At
that time, the beneficiary's allowance shall be increased to the
full amount payable to the beneficiary plus the appropriate annual
improvement factor increases and ad hoc increases.
  SEC. 68.  Section 24211 of the Education Code is amended to read:
   24211.  When a member who has been granted a disability allowance
under this part after June 30, 1972, returns to employment subject to
coverage under the Defined Benefit Program and performs:
   (a) Less than three years of creditable service after termination
of the disability allowance, the member shall receive a retirement
allowance which is the sum of the allowance calculated on service
credit accrued after the termination date of the disability
allowance, the age of the member on the last day of the month in
which the retirement allowance begins to accrue, and final
compensation using compensation earnable and projected final
compensation, plus the greater of either of the following:
   (1) A service retirement allowance calculated on service credit
accrued as of the effective date of the disability allowance, the age
of the member on the last day of the month in which the retirement
allowance begins to accrue, and projected final compensation
excluding service credited pursuant to Section 22717 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing with
Section 22820), to the termination date of the disability allowance.

   (2) The disability allowance the member was receiving immediately
prior to termination of that allowance, excluding children's
portions.
   (b) Three or more years of creditable service after termination of
the disability allowance, the member shall receive a retirement
allowance that is the greater of the following:
   (1) A service retirement allowance calculated on all actual and
projected service excluding service credited pursuant to Section
22717 or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820), the age of the member on the last
day of the month in which the retirement allowance begins to accrue,
and final compensation using compensation earnable, or projected
final compensation, or a combination of both.
   (2) The disability allowance the member was receiving immediately
prior to termination of that allowance, excluding children's
portions.
   (c) The allowance shall be increased by an amount based on any
service credited pursuant to Section 22714, 22715, or 22717 or
Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.
  SEC. 69.  Section 24212 of the Education Code is amended to read:
   24212.  (a) If a disability allowance granted under this part
after June 30, 1972, is terminated for reasons other than those
specified in Section 24213 and the member does not return to
employment subject to coverage under the Defined Benefit Program, the
member's service retirement allowance, when payable, shall be based
on projected service, excluding service credited pursuant to Section
22717 or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820), projected final compensation, and
the age of the member on the last day of the month in which the
retirement allowance begins to accrue.  The allowance payable under
this section, excluding annuities payable from accumulated annuity
deposit contributions, shall not be greater than the terminated
disability allowance excluding children's portions.
   (b) The allowance shall be increased by an amount based on any
service credited pursuant to Section 22714, 22715, or 22717 or
Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.
  SEC. 70.  Section 24213 of the Education Code is amended to read:
   24213.  (a) When a member who has been granted a disability
allowance under this part after June 30, 1972, attains normal
retirement age, or at a later date when there is no dependent child,
the disability allowance shall be terminated and the member shall be
eligible for service retirement.  The retirement allowance shall be
calculated on the projected final compensation and projected service
to normal retirement age, excluding service credited pursuant to
Section 22717 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820).  The allowance payable
under this section, excluding annuities payable from accumulated
annuity deposit contributions, shall not be greater than the
terminated disability allowance.  The allowance shall be increased by
an amount based on any service credited pursuant to Section 22714,
22715, or 22717 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) and projected final
compensation to normal retirement age.

    (b) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option provided
under this part.
  SEC. 71.  Section 24300 of the Education Code is amended to read:
   24300.  (a) Any member prior to the effective date of the member's
retirement under this part may elect an option that would provide an
actuarially modified retirement allowance payable throughout the
life of the member and the member's option beneficiary as follows:
   (1) Option 2.  The modified retirement allowance shall be paid to
the retired member and upon the retired member's death, an allowance
equal to the modified amount the retired member was receiving shall
be paid to the option beneficiary
   (2) Option 3.  The modified retirement allowance shall be paid to
the retired member and upon the retired member's death, an allowance
equal to one-half of the modified amount the retired member was
receiving shall be paid to the option beneficiary.
   (3) Option 4.  The modified retirement allowance shall be paid to
the retired member as long as both the retired member and the option
beneficiary are living.  Upon the death of either the retired member
or the option beneficiary, an allowance equal to two-thirds of the
modified amount that the retired member was receiving shall be paid
to the surviving retired member or the surviving option beneficiary.

   (4) Option 5.  The modified retirement allowance shall be paid to
the retired member as long as both the retired member and the option
beneficiary are living.  Upon the death of either the retired member
or the option beneficiary, an allowance equal to one-half of the
modified amount that the retired member was receiving shall be paid
to the surviving retired member or surviving option beneficiary.
   (5) Option 6.  The modified retirement allowance shall be paid to
the retired member and upon the retired member's death, an allowance
equal to the modified amount the retired member was receiving shall
be paid to the option beneficiary.  However, if the option
beneficiary predeceases the retired member, the retirement allowance
without modification for the option shall be payable to the retired
member.
   (6) Option 7.  The modified retirement allowance shall be paid to
the retired member and upon the retired member's death, an allowance
equal to one-half of the modified amount the retired member was
receiving shall be paid to the option beneficiary.  However, if the
option beneficiary predeceases the retired member, the retirement
allowance without modification for the option shall be payable to the
retired member.
   (7) Option 8.  (A) Any member prior to the effective date of the
member's retirement may designate multiple  option beneficiaries.
The  member who has designated more than one option beneficiary shall
select an option for each beneficiary designated that would provide
an actuarially modified retirement allowance payable throughout the
lives of the member and the member's option beneficiaries.
   (B) The modified retirement allowance shall be paid to the retired
member as long as the retired member and at least one of the option
beneficiaries are living.  Upon the retired member's death, an
allowance shall be paid to each surviving option beneficiary in
accordance with the option elected respective to that beneficiary.
However, if one or more of the option beneficiaries predeceases the
retired member, the retired member's allowance shall be adjusted in
accordance with the option elected for the deceased beneficiary.  The
member shall determine the percentage of the unmodified allowance
that will be modified by the election of Option 2, Option 3, Option
4, Option 5, Option 6, or Option 7 under this option, the aggregate
of which shall be no greater than 100 percent of the member's
unmodified allowance.  The election of this option is subject to
approval by the board.
   (b) The option beneficiary, for purposes of this section, shall
have been designated by the member on a form prescribed by the system
and duly executed and filed with the system at the time of the
member's retirement.
   (c) A member may revoke or change an election of an option at any
time prior to the effective date of the member's retirement under
this part.
   (d) This section shall become operative on January 1, 2000.
  SEC. 72.  Section 24305.5 of the Education Code is amended to read:

   24305.5.  (a) An option elected under Section 24300 may be
canceled by a retired member if the option beneficiary is not the
retired member's spouse or former spouse.  A retired member may
cancel the option before or after issuance of the first retirement
allowance payment and shall designate his or her spouse as the new
option beneficiary and the same or a different joint and survivor
option described in Section 24300.
   (b) The retired member shall notify the board, in writing on a
form provided by the system, of the designation of the new option
beneficiary.  Notification shall include a certified copy of the
marriage certificate and a properly executed form for the change.
   (c) The effective date of the new election shall be six months
following the date notification is received by the board, provided
both the retired member and the new designated option beneficiary are
then living.
   (d) The selection of the new option beneficiary and the new option
under this section and Section 24300 shall be subject to a further
actuarial modification of the modified retirement allowance.  In no
event may a retired member elect a joint and survivor option that
would result in any additional liability to the fund.  Modification
of the retirement allowance because of the new option beneficiary and
the new option shall be based on the ages of the retired member and
the new option beneficiary as of the effective date of the new
election.
  SEC. 73.  Section 24306 of the Education Code is amended to read:
   24306.  (a) (1) If an option beneficiary designated in the
election of an Option 2, Option 3, Option 4, or Option 5, or in the
election of Option 2, Option 3, Option 4, or Option 5 under Option 8,
predeceases the retired member, the retired member may designate
either or both of the following:
   (A) A new option beneficiary.
   (B) A different joint and survivor option described in Section
24300.
   (2) The effective date of the change shall be six months following
the date notification is received by the board, provided both the
retired member and the designated option beneficiary are then living.
  Notification shall include proof of death of the predeceased
beneficiary and a properly executed form for the change.
   (3) The selection of the new joint and survivor option under this
subdivision and Section 24300 is subject to a further actuarial
modification of the modified retirement allowance.  In no event may a
retired member elect a joint and survivor option that would result
in any additional liability to the fund.
   (b) If an option beneficiary designated in the election of an
Option 6 or Option 7 or in the election of Option 6 or Option 7 under
Option 8, pursuant to Section 24300 or 24307 predeceases the retired
member, that portion of the retirement allowance attributable to
Option 6 or Option 7 without modification for the option shall be
payable to the retired member upon notification to the board and
shall commence to accrue to the retired member as of the day
following the date of the death of the option beneficiary.
Notification to the board shall include proof of death of the
beneficiary.
   (c) This section shall become operative on January 1, 2000.
  SEC. 74.  Section 24307 of the Education Code is amended to read:
   24307.  (a) A member who qualifies to apply for retirement under
Section 24201 or 24203 may make a preretirement election of an
option, as provided in Section 24300 without right of revocation or
change after the effective date of retirement, except as provided in
this part.  The preretirement election of an option shall become
effective on the date a properly executed form prescribed by the
system is signed, providing the election is received in the system's
office in Sacramento within 30 days after the date of signature.
   (b) A member who makes a preretirement election of an Option 2,
Option 3, Option 4, Option 5, Option 6, or Option 7 may subsequently
make a preretirement election of Option 8.  The member may retain the
same option and the same option beneficiary as named in the prior
preretirement election, as an option under Option 8.
   (c) Upon the member's death prior to the effective date of
retirement, the beneficiary who was designated under the option
elected and who survives shall receive an allowance calculated under
the option, under the assumption that the member retired for service
on the date of death.  The payment of the allowance to the option
beneficiary shall be in lieu of the family allowance provided in
Section 23804, the payment provided in paragraph (1) of subdivision
(a) of Section 23802, the survivor benefit allowance provided in
Section 23854, and the payment provided in subdivisions (a) and (b)
of Section 23852, except that if the beneficiary dies before all of
the member's accumulated retirement contributions are paid, the
balance, if any, shall be paid to the estate of the person last
receiving or entitled to receive the allowance.  The accumulated
annuity deposit contributions and the death payment provided in
Sections 23801 and 23851 shall be paid to the beneficiary in a lump
sum.
   (d) If the member subsequently retires for service, and the
elected option has not been canceled pursuant to Section 24309, a
modified service retirement allowance computed under Section 24300
and the option elected shall be paid.
   (e) The amount of the service retirement allowance prior to
applying the option factor shall be calculated as of the earlier of
the member's age at death before retirement or age on the last day of
the month in which the member requested service retirement be
effective.  The modification of the service retirement allowance
under the option elected shall be based on the ages of the member and
the beneficiary designated under the option, at the date the
election was signed.
   (f) A member who terminates the service retirement allowance
pursuant to Section 24208 shall not be eligible to file a
preretirement election of an option until one calendar year elapses
from the date the allowance is terminated.
   (g) The system shall inform members who are qualified to make a
preretirement election of an option, through the annual statements of
account, that the election of an option can be made.
   (h) This section shall become operative on January 1, 2000.
  SEC. 75.  Section 24600 of the Education Code is amended to read:
   24600.  (a) A retirement allowance under this part begins to
accrue on the effective date of the member's retirement and ceases on
the earlier of the day of the member's death or the day on which the
retirement allowance terminated for a reason other than the member's
death.
   (b) A retirement allowance payable to an option beneficiary under
this part begins to accrue on the day following the day of the
retired member's death and ceases on the day of the option
beneficiary's death.
   (c) A disability allowance under this part begins to accrue on the
effective date of the member's disability and ceases on the earlier
of the day of the member's death or the day on which the disability
allowance terminated for a reason other than the member's death.
   (d) A family allowance under this part begins to accrue on the day
following the day of the member's death and ceases on the day of the
event that terminates eligibility for the allowance.
   (e) A survivor benefit allowance payable to a surviving spouse
under this part pursuant to Chapter 23 (commencing with Section
23850) begins to accrue on the day the member would have attained 60
years of age or on the day following the day of the member's death,
as elected by the surviving spouse, and ceases on the day of the
surviving spouse's death.
   (f) A child's portion of an allowance under this part begins to
accrue on the effective date of that allowance and ceases on the
earlier of either the termination of the child's eligibility or the
termination of the allowance.  An allowance payable because of a
full-time student shall terminate on the first day of the month
following the end of the school quarter or semester that is in
progress in the month the full-time student attains 22 years of age.
Any adjustment to an allowance because of a full-time student's
periods of nonattendance shall be made as follows:  the allowance
shall cease on the first day of the month in which return to
full-time attendance was required and shall begin to accrue again on
the first day of the month in which full-time attendance resumes.
   (g) Supplemental payments issued under this part pursuant to
Sections 24701, 24702, and 24703 to retired members, disabled
members, and beneficiaries shall begin to accrue pursuant to Sections
24701, 24702, and 24703 and shall cease to accrue as of the
termination dates specified in subdivisions (a) to (f), inclusive.
   (h) Notwithstanding any other provision of this part or other law,
distributions from the plan with respect to the Defined Benefit
Program shall be made in accordance with Section 401(a)(9) of the
Internal Revenue Code of 1986, as amended, including the incidental
death benefit requirements of Section 401(a)(9)(G) and the
regulations thereunder, and the required beginning date of benefit
payments that represent the entire interest of the member in the plan
with respect to the Defined Benefit Program shall be as follows:
   (1) In the case of a refund of contributions, as described in
Chapter 12 (commencing with Section 23100) of this part, not later
than April 1 of the calendar year following the later of (A) the
calendar year in which the member attains 70 1/2 years of age or (B)
the calendar year in which the member terminates employment within
the meaning of subdivision (i).
   (2) In the case of a retirement allowance, as defined in Section
22150, beginning not later than April 1 of the calendar year
following the later of (A) the calendar year in which the member
attains 70 1/2 years of age or (B) the calendar year in which the
member terminates employment within the meaning of subdivision (i),
to continue over the life of the member or the lives of the member
and the member's option beneficiary, or over the life expectancy of
the member or the life expectancy of the member and the member's
option beneficiary.
   (i) For purposes of subdivision (h), "terminates employment" means
the later of the termination of employment subject to coverage by
the Defined Benefit Program or the termination of employment in a
position requiring or permitting membership in another public
retirement system in this state the compensation from which may be
included in final compensation under Section 22127.
   (j) This section shall become operative on January 1, 2002.
  SEC. 76.  Section 24615 of the Education Code is amended to read:
   24615.  (a) If the board determines that contributions are due the
system under this part from a retired member, disabled member, or a
person who has died and the person is unable to pay the amount due,
the board may withhold all or part of subsequent payments due the
retired member, disabled member, or survivor, until the amounts
withheld equal the contributions due plus regular interest to the
date of payment.  Total contributions plus regular interest due shall
be recovered by the system within 18 months.
   (b) Any payment of contributions that a member or beneficiary is
required by law to make to the system shall be paid upon receipt of
written notice from the system.  Payment may be made either in a lump
sum or installments as permitted by the system.  Payment of
contributions due the system not discovered or unpaid, for whatever
reason, prior to the time or retirement, disability, or death shall
be paid prior to granting an allowance or benefit to the member or
beneficiary unless, in the opinion of the board, the making of the
payment prior to receipt of an allowance or benefit would impose an
undue hardship, in which case payment may be made by the system
withholding not more than 18 consecutive monthly installments from
payments due from the system.  Those installments shall not be less
than twenty-five dollars ($25) per month except for the last
installment, that may be less.
  SEC. 77.  Section 26135 of the Education Code is amended to read:
   26135.  "Plan year" means the calendar, policy, or fiscal year on
which the records of the plan are kept, with respect to the Cash
Balance Benefit Program.  The board by means of plan amendment shall
determine the plan year.
  SEC. 78.  Section 26202 of the Education Code is amended to read:
   26202.  (a) The board shall establish a Gain and Loss Reserve
within the Teachers' Retirement Fund for the Cash Balance Benefit
Program.  The board has sole authority to administer the Gain and
Loss Reserve to be drawn upon to the extent necessary to credit
interest to employee accounts and employer accounts at the minimum
interest rate during years in which the investment earnings of the
plan with respect to the Cash Balance Benefit Program are not
sufficient for that purpose, and, where necessary, to provide
additions to the Annuitant Reserve for monthly annuity payments.
   (b) The board shall establish and periodically review goals
regarding the sufficiency of the Gain and Loss Reserve based on the
recommendation of the actuary.
   (c) In the event that the total amount of investment earnings of
the plan with respect to the Cash Balance Benefit Program for any
plan year exceeds the sum of the total amount required to credit all
employee and employer accounts at the minimum interest rate for the
plan year plus the administrative costs of the plan with respect to
the Cash Balance Benefit Program for the plan year, the board shall
determine the amount, if any, that is to be credited to the Gain and
Loss Reserve for the plan year.  That determination shall be made
upon recommendation of the actuary following the adoption by the
board of the actuarial valuation undertaken following the plan year
pursuant to Section 26202, but no later than June 30 following the
end of the plan year.  In determining whether an amount is to be
credited to the Gain and Loss Reserve, the board shall consider the
sufficiency of the reserve in light of the goal established for the
sufficiency and the recommendations of the actuary.
  SEC. 79.  Section 26215 of the Education Code is amended to read:
   26215.  (a) Information filed with the system by a participant or
beneficiary is confidential and shall be used by the system for the
sole purpose of carrying into effect the provisions of this part.  No
official or employee of the system who has access to the individual
records of a participant or beneficiary shall divulge any
confidential information concerning those records to any person
except in the following instances:
   (1) To the participant or beneficiary to whom the information
relates.
   (2) To the authorized representative of the participant or
beneficiary.
   (3) To the governing board of the participant's current or former
employer.
   (4) To any department, agency, or political subdivision of this
state.
   (5) To other individuals as necessary to locate a person to whom a
benefit may be payable.
   (6) Pursuant to subpoena.
   (b) Information filed with the system in a beneficiary designation
form may be released after the death of the participant to those
persons who may provide information necessary for the distribution of
benefits.
   (c) The information is not open to inspection by anyone except the
board and its officers and employees of the system, and any person
authorized by statute to make inspections.
  SEC. 80.  Section 26301 of the Education Code is amended to read:
   26301.  (a) Employers shall report, on a form prescribed by the
system, contributions paid on behalf of each participant in each pay
period, along with all other information required by the system no
later than 10 working days following the last day of the pay period
in which the salary was earned, and the report shall be delinquent
immediately thereafter.
   (b) The board may assess a penalty against the employer for a
report submitted late or in an unacceptable form.
  SEC. 81.  Section 26303 of the Education Code is amended to read:
   26303.  (a) Employers shall transmit to the plan the employee
contributions and employer contributions with respect to the Cash
Balance Benefit Program for salary paid to each participant during
the pay period no later than 10 working days following the last day
of the pay period in which the salary was earned.
   (b) Payments shall be delinquent on the 11th working day
thereafter, and interest shall begin to accrue at the minimum
interest rate from that day until payment for the contribution report
is received in full by the system.  The board may collect interest
for late payment from the employer under this subdivision.
  SEC. 82.  Section 26401.5 of the Education Code is amended to read:

   26401.5.  (a) A member of the Defined Benefit Program who is
employed by more than one employer to perform creditable service for
less than 50 percent of the full-time equivalent for the position
with each employer shall not be eligible to make an election as
provided in Section 26401 unless and until all employers by which the
member is employed to perform creditable service provide the
benefits of this part for their employees.
   (b) If a member of the Defined Benefit Program who pursuant to
subdivision (a) has made an election as provided in Section 26401 is
subsequently employed to perform creditable service for an employer
that does not provide the benefits of this part for its employees,
contributions shall no longer be made to the Cash Balance Benefit
Program on his or her behalf and creditable service performed for all
employers shall be subject to coverage under the Defined Benefit
Program, with no subsequent right of election pursuant to Section
26401 or subdivision (a).
  SEC. 83.  Section 26504 of the Education Code is amended to read:
   26504.  The employer may enter into a collective bargaining
agreement to pay a different employer contribution rate and a
different employee contribution rate, provided all of the following
conditions are met:
   (a) The sum of the employee contributions and employer
contributions for each participant shall equal or exceed 8 percent of
salary.
   (b) The employee contribution rate may exceed the employer
contribution rate but in no event shall the employer contribution
rate be less than 4 percent.
   (c) The employee contribution rate and employer contribution rate
shall be the same for each participant employed by the employer.
   (d) The employee contribution rate and employer contribution rate
shall be in one-quarter percent increments.
   (e) The employee contribution rate and employer contribution rate
as determined under the collective bargaining agreement shall become
effective on the first day of the plan year following notification to
the system and shall remain in effect for at least one plan year.
However, the employee contribution rate and the employer contribution
rate as determined under the collective bargaining agreement may
become effective as of the first day of the plan year in which notice
is given if it is so provided in the collective bargaining agreement
and if a lump-sum contribution is made to the plan equal to the
additional employee and employer contributions, if any, that would
have been required if the contribution rates had been in effect on
the first day of the plan year.  Interest shall be credited at the
minimum interest rate with respect to the lump-sum contribution
commencing with the first month after the contribution is made.
   (f) The employer has filed notice of the employee contribution
rate and the employer contribution rate on a form prescribed by the
system.
  SEC. 84.  Section 26603 of the Education Code is amended to read:
   26603.  All employee contributions shall be credited to employee
accounts and all employer contributions shall be credited to employer
accounts as of the first working day following the date all
contributions to fully satisfy the contribution report as submitted
by the employer are received by the system.
  SEC. 85.  Section 26604 of the Education Code is amended to read:
   26604.  (a) Beginning June 1, 1996, prior to the Cash Balance Plan
becoming effective, and prior to the beginning of each plan year
thereafter, the board, by plan amendment with respect to the Cash
Balance Benefit Program, shall declare the minimum interest rate for
crediting employee accounts and employer accounts with respect to the
Cash Balance Benefit Program during the following plan year.
   (b) All interest shall be computed at the minimum interest rate on
the balance of the employee account and the employer account and
shall be compounded daily.
   (c) Interest for contributions credited during that month to the
respective account shall accrue at the minimum interest rate from the
first working day following the date contributions are received in
full by the system pursuant to Section 26603.
   (d) Interest shall not be credited to employee accounts and
employer accounts that have been transferred to the Annuitant Reserve
for payment of an annuity.
  SEC. 86.  Section 27410 of the Education Code is amended to read:
   27410.  (a) The nonparticipant spouse who is awarded separate
nominal accounts shall have the right to designate, pursuant to
Sections 27100 to 27102, inclusive, a beneficiary or beneficiaries to
receive the amounts credited to the separate nominal accounts of the
nonparticipant spouse on his or her date of death, and any annuity
attributable to the separate nominal accounts which is unpaid on the
date of the death of the nonparticipant spouse.
   (b) This section shall not be construed to provide the
nonparticipant spouse with any right to elect a joint and survivor
annuity pursuant to paragraphs (3) and (4) of subdivision (b) of
Section 26807.
  SEC. 87.  Section 44494 of the Education Code is amended to read:
   44494.  (a) On or before September 1 of each year, participating
school districts that receive funding pursuant to subdivision (a) of
Section 44492 shall allocate no less than four thousand dollars
($4,000) to provide each qualified mentor with an additional annual
stipend over and                                               above
the regular salary to which he or she is entitled.  The amount of the
annual stipend shall be four thousand dollars ($4,000) for a full
school year of service as a mentor, or a pro rata share of that
amount for less than a full school year of service as a mentor,
except that participating school districts that receive funding
pursuant to subdivision (b) of Section 44492 shall allocate the full
amount so received to provide a qualified mentor with an additional
annual stipend over and above the regular salary to which he or she
is entitled.  This stipend shall not be counted as salary or wages
for purposes of calculating employer and employee contributions or
employee benefits under the Defined Benefit Program of the State
Teachers' Retirement Plan.
   (b) A mentor may propose that the district allocate all or part of
the stipend for his or her professional growth or release time.
   (c) The governing board may designate certificated employees as
mentor teachers pursuant to Section 44491 and pay these persons the
additional annual stipend authorized under subdivision (a) for a
period not to exceed three consecutive school years.  Upon completing
three years as a mentor teacher, an individual may be reviewed and
renominated.
   (d) The subject of participation by a school district or an
individual certificated classroom teacher in a mentor teacher program
shall not be included within the scope of representation in
collective bargaining among a public school employer and eligible
employee organizations.
  SEC. 88.  Section 20639 of the Government Code is amended to read:

   20639.  The compensation earnable during any period of service as
a member of the Judges' Retirement System, the Legislators'
Retirement System, or the Defined Benefit Program of the State
Teachers' Retirement Plan shall be considered compensation earnable
as a member of this system for purposes of computing final
compensation for the member, if he or she retires concurrently under
both systems.
   A member shall be deemed to have retired concurrently under this
system and under the Defined Benefit Program of the State Teachers'
Retirement Plan, if the member is enrolled as a disabled member under
the Defined Benefit Program of the State Teachers' Retirement Plan
and for retirement under this system on the same effective date.
  SEC. 89.  Section 47611 of the Education Code is amended to read:
   47611.  If a charter school chooses to make the State Teacher's
Retirement Plan available, all employees of the charter school who
perform creditable service shall be entitled to have that service
covered under the plan's Defined Benefit Program or Cash Balance
Benefit Program, and all provisions of Part 13 (commencing with
Section 22000) and Part 14 (commencing with Section 26000) shall
apply in the same manner as the provisions apply to other public
schools in the school district that granted the charter.
  SEC. 90.  Any section of any act enacted by the Legislature during
the 1999 calendar year that takes effect on or before January 1,
2000, and that amends, amends and renumbers, adds, repeals and adds,
or repeals a section that is amended, amended and renumbered,
repealed and added, or repealed by this act, shall prevail over this
act, whether that act is enacted prior to, or subsequent to, the
enactment of this act.  The repeal, or repeal and addition, of any
article, chapter, part, title, or division of any code by this act
shall not become operative if any section or any other act that is
enacted by the Legislature during the 1999 calendar year and takes
effect on or before January 1, 2000, amends, amends and renumbers,
adds, repeals and adds, or repeals any section contained in that
article, chapter, part, title, or division.
